UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~June 30, 2021~~March 31, 2022

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________ to _______

Commission File Number 1-134

CURTISS-WRIGHT CORPORATION

(Exact name of Registrant as specified in its charter)


Delaware						13-0612970
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


130 Harbour Place Drive, Suite 300
Davidson,	North Carolina	28036
(Address of principal executive offices)		(Zip Code)

(704) 869-4600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CW	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period of time that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, par value $1.00 per share: ~~40,883,999~~38,445,431 shares as of ~~July 31, 2021.~~April 30, 2022.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

TABLE of CONTENTS


PART I – FINANCIAL INFORMATION			PAGE


Item 1.	Financial Statements (Unaudited):

		Condensed Consolidated Statements of Earnings	4

		Condensed Consolidated Statements of Comprehensive Income	5

		Condensed Consolidated Balance Sheets	6

		Condensed Consolidated Statements of Cash Flows	7

		Condensed Consolidated Statements of Stockholders’ Equity	8

		Notes to Condensed Consolidated Financial Statements	109

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		2117

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		3227

Item 4.	Controls and Procedures		3227


PART II – OTHER INFORMATION


Item 1.	Legal Proceedings		3328

Item 1A.	Risk Factors		3328

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		3328

Item 3.	Defaults upon Senior Securities		3328

Item 4.	Mine Safety Disclosures		3328

Item 5.	Other Information		3328

Item 6.	Exhibits		3430

Signatures			3531

Page 3

PART 1- FINANCIAL INFORMATION

Item 1. Financial Statements

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(UNAUDITED)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
(In thousands, except per share data)	(In thousands, except per share data)	2021		2020		2021		2020		(In thousands, except per share data)	2022		2021
Net sales	Net sales									Net sales
Product sales	Product sales	$	515,392	$	466,445	$	1,024,367	$	964,374	Product sales	$	453,421	$	508,975
Service sales	Service sales	106,103		83,602		194,187		186,904		Service sales	106,040		88,084
Total net sales	Total net sales	621,495		550,047		1,218,554		1,151,278		Total net sales	559,461		597,059
Cost of sales	Cost of sales									Cost of sales
Cost of product sales	Cost of product sales	331,881		309,152		661,335		639,965		Cost of product sales	294,527		329,454
Cost of service sales	Cost of service sales	64,895		54,869		122,743		124,708		Cost of service sales	63,532		57,848
Total cost of sales	Total cost of sales	396,776		364,021		784,078		764,673		Total cost of sales	358,059		387,302
Gross profit	Gross profit	224,719		186,026		434,476		386,605		Gross profit	201,402		209,757
Research and development expenses	Research and development expenses	23,194		18,269		45,057		36,576		Research and development expenses	20,549		21,863
Selling expenses	Selling expenses	29,564		25,193		59,160		56,781		Selling expenses	28,092		29,596
General and administrative expenses	General and administrative expenses	77,378		76,606		150,610		153,264		General and administrative expenses	87,600		73,232
Restructuring expenses		0		10,609		0		12,189
Loss on divestiture										Loss on divestiture	4,651		—
Operating income	Operating income	94,583		55,349		179,649		127,795		Operating income	60,510		85,066
Interest expense	Interest expense	10,180		8,515		20,139		16,004		Interest expense	9,530		9,959
Other income (expense), net		440		(4,105)		5,283		1,427
Other income, net										Other income, net	2,997		4,843
Earnings before income taxes	Earnings before income taxes	84,843		42,729		164,793		113,218		Earnings before income taxes	53,977		79,950
Provision for income taxes	Provision for income taxes	(23,435)		(11,711)		(43,916)		(30,439)		Provision for income taxes	(13,292)		(20,481)
Net earnings	Net earnings	$	61,408	$	31,018	$	120,877	$	82,779	Net earnings	$	40,685	$	59,469

Net earnings per share:	Net earnings per share:									Net earnings per share:
Basic earnings per share	Basic earnings per share	$	1.50	$	0.75	$	2.95	$	1.97	Basic earnings per share	$	1.06	$	1.45
Diluted earnings per share	Diluted earnings per share	$	1.49	$	0.74	$	2.94	$	1.95	Diluted earnings per share	$	1.05	$	1.45

Dividends per share	Dividends per share	0.18		0.17		0.35		0.34		Dividends per share	0.18		0.17

Weighted-average shares outstanding:	Weighted-average shares outstanding:									Weighted-average shares outstanding:
Basic	Basic	40,915		41,629		40,921		42,092		Basic	38,456		40,933
Diluted	Diluted	41,088		41,855		41,092		42,362		Diluted	38,668		41,103

See notes to condensed consolidated financial statements	See notes to condensed consolidated financial statements									See notes to condensed consolidated financial statements

Page 4

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(In thousands)


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021		2020		2021		2020			2022		2021
Net earnings	Net earnings	$	61,408	$	31,018	$	120,877	$	82,779	Net earnings	$	40,685	$	59,469
Other comprehensive income (loss)	Other comprehensive income (loss)									Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax (1)	Foreign currency translation adjustments, net of tax (1)	$	7,243	$	24,185	$	3,283	$	(26,090)	Foreign currency translation adjustments, net of tax (1)	$	(6,825)	$	(3,960)
Pension and postretirement adjustments, net of tax (2)	Pension and postretirement adjustments, net of tax (2)	4,442		4,002		10,042		8,683		Pension and postretirement adjustments, net of tax (2)	5,766		5,600
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	11,685		28,187		13,325		(17,407)		Other comprehensive income (loss), net of tax	(1,059)		1,640
Comprehensive income	Comprehensive income	$	73,093	$	59,205	$	134,202	$	65,372	Comprehensive income	$	39,626	$	61,109

(1) The tax benefit included in foreign currency translation adjustments for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 ~~and June 30, 2020~~ was immaterial.

(2) The tax expense included in pension and postretirement adjustments for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 was ~~$1.5~~$1.4 million and ~~$3.1 million, respectively. The tax expense included in pension and postretirement adjustments for the three and six months ended June 30, 2020 was $1.3 million and $2.7~~$1.7 million, respectively.

See notes to condensed consolidated financial statements

Page 5

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except per share data)


		June 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	197,508	$	198,248	Cash and cash equivalents	$	136,682	$	171,004
Receivables, net	Receivables, net	644,089		588,718		Receivables, net	661,129		647,148
Inventories, net	Inventories, net	446,689		428,879		Inventories, net	448,122		411,567
Assets held for sale	Assets held for sale	29,687		27,584		Assets held for sale	—		10,988
Other current assets	Other current assets	83,417		57,395		Other current assets	63,942		67,101
Total current assets	Total current assets	1,401,390		1,300,824		Total current assets	1,309,875		1,307,808
Property, plant, and equipment, net	Property, plant, and equipment, net	366,789		378,200		Property, plant, and equipment, net	355,363		360,031
Goodwill	Goodwill	1,466,735		1,455,137		Goodwill	1,458,899		1,463,026
Other intangible assets, net	Other intangible assets, net	568,604		609,630		Other intangible assets, net	523,913		538,077
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	144,274		150,898		Operating lease right-of-use assets, net	147,224		143,613
Prepaid pension asset	Prepaid pension asset	105,963		92,531		Prepaid pension asset	260,238		256,422
Other assets	Other assets	31,230		34,114		Other assets	33,855		34,568
Total assets	Total assets	$	4,084,985	$	4,021,334	Total assets	$	4,089,367	$	4,103,545
Liabilities	Liabilities					Liabilities
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	100,000		100,000		Current portion of long-term debt	$	202,500	$	—
Accounts payable	Accounts payable	166,253		201,237		Accounts payable	168,772		211,640
Accrued expenses	Accrued expenses	133,264		146,833		Accrued expenses	109,077		144,466
Income taxes payable						Income taxes payable	1,478		3,235
Deferred revenue	Deferred revenue	260,358		253,411		Deferred revenue	224,679		260,157
Liabilities held for sale	Liabilities held for sale	10,573		10,141		Liabilities held for sale	—		12,655
Other current liabilities	Other current liabilities	104,024		98,755		Other current liabilities	93,745		102,714
Total current liabilities	Total current liabilities	774,472		810,377		Total current liabilities	800,251		734,867
Long-term debt	Long-term debt	957,504		958,292		Long-term debt	967,744		1,050,610
Deferred tax liabilities, net	Deferred tax liabilities, net	121,895		115,007		Deferred tax liabilities, net	150,085		147,349
Accrued pension and other postretirement benefit costs	Accrued pension and other postretirement benefit costs	97,143		98,345		Accrued pension and other postretirement benefit costs	84,610		91,329
Long-term operating lease liability	Long-term operating lease liability	127,136		133,069		Long-term operating lease liability	128,897		127,152
Long-term portion of environmental reserves	Long-term portion of environmental reserves	14,655		15,422		Long-term portion of environmental reserves	13,924		13,656
Other liabilities	Other liabilities	97,476		103,248		Other liabilities	94,436		112,092
Total liabilities	Total liabilities	2,190,281		2,233,760		Total liabilities	2,239,947		2,277,055
Contingencies and commitments (Note 14)
Contingencies and commitments (Note 13)						Contingencies and commitments (Note 13)
Stockholders’ equity	Stockholders’ equity					Stockholders’ equity
Common stock, $1 par value, 100,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 49,187,378 shares issued as of June 30, 2021 and December 31, 2020; outstanding shares were 40,871,691 as of June 30, 2021 and 40,916,429 as of December 31, 2020		49,187		49,187
Common stock, $1 par value,100,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 49,187,378 shares issued as of March 31, 2022 and December 31, 2021; outstanding shares were 38,471,738 as of March 31, 2022 and 38,469,778 as of December 31, 2021						Common stock, $1 par value,100,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 49,187,378 shares issued as of March 31, 2022 and December 31, 2021; outstanding shares were 38,471,738 as of March 31, 2022 and 38,469,778 as of December 31, 2021	49,187		49,187
Additional paid in capital	Additional paid in capital	119,946		122,535		Additional paid in capital	122,603		127,104
Retained earnings	Retained earnings	2,776,884		2,670,328		Retained earnings	2,942,580		2,908,827
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(297,531)		(310,856)		Accumulated other comprehensive loss	(191,524)		(190,465)
Common treasury stock, at cost (8,315,687 shares as of June 30, 2021 and 8,270,949 shares as of December 31, 2020)		(753,782)		(743,620)
Common treasury stock, at cost (10,715,640 shares as of March 31, 2022 and 10,717,600 shares as of December 31, 2021)						Common treasury stock, at cost (10,715,640 shares as of March 31, 2022 and 10,717,600 shares as of December 31, 2021)	(1,073,426)		(1,068,163)
Total stockholders’ equity	Total stockholders’ equity	1,894,704		1,787,574		Total stockholders’ equity	1,849,420		1,826,490
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,084,985	$	4,021,334	Total liabilities and stockholders’ equity	$	4,089,367	$	4,103,545

See notes to condensed consolidated financial statements	See notes to condensed consolidated financial statements					See notes to condensed consolidated financial statements

Page 6

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


		Six Months Ended					Three Months Ended
		June 30,					March 31,
(In thousands)	(In thousands)	2021		2020		(In thousands)	2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings	Net earnings	$	120,877	$	82,779	Net earnings	$	40,685	$	59,469
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities
Adjustments to reconcile net earnings to net cash used for operating activities:						Adjustments to reconcile net earnings to net cash used for operating activities:
Depreciation and amortization	Depreciation and amortization	57,616		56,568		Depreciation and amortization	27,363		28,595
Loss on divestiture						Loss on divestiture	4,651		—
Gain on sale/disposal of long-lived assets	Gain on sale/disposal of long-lived assets	(590)		(373)		Gain on sale/disposal of long-lived assets	(3,070)		(349)
Deferred income taxes	Deferred income taxes	6,293		4,208		Deferred income taxes	803		3,629
Share-based compensation	Share-based compensation	6,725		7,140		Share-based compensation	3,809		3,327
Foreign exchange loss on substantial liquidation of subsidiary		0		9,550
Inventory write-downs		0		9,015
Change in operating assets and liabilities, net of businesses acquired:	Change in operating assets and liabilities, net of businesses acquired:					Change in operating assets and liabilities, net of businesses acquired:
Receivables, net	Receivables, net	(53,787)		31,898		Receivables, net	(13,414)		(27,593)
Inventories, net	Inventories, net	(15,214)		(40,691)		Inventories, net	(38,149)		(18,059)
Progress payments	Progress payments	(2,680)		(470)		Progress payments	(395)		(1,114)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(58,217)		(55,806)		Accounts payable and accrued expenses	(79,492)		(71,528)
Deferred revenue	Deferred revenue	6,663		(12,622)		Deferred revenue	(35,154)		(14,836)
Income taxes payable						Income taxes payable	6,927		16,247
Pension and postretirement liabilities, net	Pension and postretirement liabilities, net	(4,017)		(149,514)		Pension and postretirement liabilities, net	(6,034)		1,182
Other current and long-term assets and liabilities	Other current and long-term assets and liabilities	(15,193)		6,109		Other current and long-term assets and liabilities	(32,845)		(5,573)
Net cash provided by (used for) operating activities		48,476		(52,209)
Net cash used for operating activities						Net cash used for operating activities	(124,315)		(26,603)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Proceeds from sale/disposal of long-lived assets	Proceeds from sale/disposal of long-lived assets	2,982		2,411		Proceeds from sale/disposal of long-lived assets	5,567		1,022
Additions to property, plant, and equipment	Additions to property, plant, and equipment	(17,771)		(29,324)		Additions to property, plant, and equipment	(10,896)		(8,537)
Acquisition of businesses, net of cash acquired		0		(82,003)
Additional consideration paid on prior year acquisitions	Additional consideration paid on prior year acquisitions	(5,340)		0		Additional consideration paid on prior year acquisitions	(5,062)		(5,340)
Net cash used for investing activities	Net cash used for investing activities	(20,129)		(108,916)		Net cash used for investing activities	(10,391)		(12,855)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings under revolving credit facility	Borrowings under revolving credit facility	163,507		306,797		Borrowings under revolving credit facility	241,198		65,301
Payment of revolving credit facility	Payment of revolving credit facility	(163,507)		(231,797)		Payment of revolving credit facility	(121,198)		(65,301)
Repurchases of common stock	Repurchases of common stock	(24,395)		(124,613)		Repurchases of common stock	(18,857)		(11,797)
Proceeds from share-based compensation	Proceeds from share-based compensation	4,919		5,189		Proceeds from share-based compensation	5,284		4,919
Dividends paid		(6,961)		(7,089)
Other	Other	(462)		(429)		Other	(248)		(229)
Net cash used for financing activities		(26,899)		(51,942)
Net cash provided by (used for) financing activities						Net cash provided by (used for) financing activities	106,179		(7,107)
Effect of exchange-rate changes on cash	Effect of exchange-rate changes on cash	(2,188)		(22,583)		Effect of exchange-rate changes on cash	(5,795)		(4,614)
Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(740)		(235,650)		Net decrease in cash and cash equivalents	(34,322)		(51,179)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	198,248		391,033		Cash and cash equivalents at beginning of period	171,004		198,248
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	197,508	$	155,383	Cash and cash equivalents at end of period	$	136,682	$	147,069
See notes to condensed consolidated financial statements	See notes to condensed consolidated financial statements					See notes to condensed consolidated financial statements

Page 7

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

(In thousands)

For the six months ended June 30, 2021
Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock
December 31, 2020 $ 49,187 $ 122,535 $ 2,670,328 $ (310,856) $ (743,620)
Net earnings — — 120,877 — —
Other comprehensive income, net of tax — — — 13,325 —
Dividends declared — — (14,321) — —
Restricted stock — (9,007) — — 9,007
Employee stock purchase plan and stock options exercised — 411 — — 4,508
Share-based compensation — 6,604 — — 121
Repurchase of common stock (1)
— — — — (24,395)
Other — (597) — — 597
June 30, 2021 $ 49,187 $ 119,946 $ 2,776,884 $ (297,531) $ (753,782)

For the three months ended June 30, 2021
Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock
March 31, 2021 $ 49,187 $ 119,172 $ 2,722,829 $ (309,216) $ (743,808)
Net earnings — — 61,408 — —
Other comprehensive income, net of tax — — — 11,685 —
Dividends declared — — (7,353) — —
Restricted stock — (2,600) — — 2,600
Share-based compensation — 3,374 — — 24
Repurchase of common stock (1)
— — — — (12,598)
June 30, 2021 $ 49,187 $ 119,946 $ 2,776,884 $ (297,531) $ (753,782)

~~Page 8~~


	For the three months ended March 31, 2021
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
December 31, 2020	$	49,187	$	122,535	$	2,670,328	$	(310,856)	$	(743,620)
Net earnings	—		—		59,469		—		—
Other comprehensive income, net of tax	—		—		—		1,640		—
Dividends declared	—		—		(6,968)				—
Restricted stock	—		(6,407)		—		—		6,407
Employee stock purchase plan	—		411		—		—		4,508
Share-based compensation	—		3,230		—		—		97
Repurchase of common stock (1)	—		—		—		—		(11,797)
Other	—		(597)		—		—		597
March 31, 2021	$	49,187	$	119,172	$	2,722,829	$	(309,216)	$	(743,808)

~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY~~

~~(UNAUDITED)~~

~~(In thousands)~~

For the six months ended June 30, 2020
Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock
December 31, 2019 $ 49,187 $ 116,070 $ 2,497,111 $ (325,274) $ (562,722)
Net earnings — — 82,779 — —
Other comprehensive loss, net of tax — — — (17,407) —
Dividends declared — — (14,163) — —
Restricted stock — (4,115) — — 4,115
Employee stock purchase plan and stock options exercised — 106 — — 5,081
Share-based compensation — 6,923 — — 217
Repurchase of common stock (1)
— — — — (124,613)
Other — (517) — — 517
June 30, 2020 $ 49,187 $ 118,467 $ 2,565,727 $ (342,681) $ (677,405)

For the three months ended June 30, 2020
Common Stock Additional Paid in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock
March 31, 2020 $ 49,187 $ 114,911 $ 2,541,777 $ (370,868) $ (665,170)
Net earnings — — 31,018 — —
Other comprehensive income, net of tax — — — 28,187 —
Dividends declared — — (7,068) — —
Employee stock purchase plan and stock options exercised — (244) — — 365
Share-based compensation — 3,800 — — 0
Repurchase of common stock (1)
— — — — (12,600)
June 30, 2020 $ 49,187 $ 118,467 $ 2,565,727 $ (342,681) $ (677,405)
See notes to condensed consolidated financial statements


	For the three months ended March 31, 2022
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
December 31, 2021	$	49,187	$	127,104	$	2,908,827	$	(190,465)	$	(1,068,163)
Net earnings	—		—		40,685		—		—
Other comprehensive loss, net of tax	—		—		—		(1,059)		—
Dividends declared	—		—		(6,932)		—		—
Restricted stock	—		(8,523)		—		—		8,523
Employee stock purchase plan	—		814		—		—		4,470
Share-based compensation	—		3,714		—		—		95
Repurchase of common stock (1)	—		—		—		—		(18,857)
Other	—		(506)		—		—		506
March 31, 2022	$	49,187	$	122,603	$	2,942,580	$	(191,524)	$	(1,073,426)

(1) For both the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, the Corporation repurchased approximately 0.1 million ~~and 0.2 million~~ shares of its common ~~stock, respectively. For the three and six months ended June 30, 2020, the Corporation repurchased approximately 0.1 million and 1.2 million shares of its common stock, respectively.~~stock.

See notes to condensed consolidated financial statements

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION

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

The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated.

The unaudited condensed consolidated financial statements of the Corporation have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted as permitted by such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of these financial statements.

Management is required 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. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete using the over-time revenue recognition accounting method, 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. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there were no significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s ~~2020~~2021 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

On January 1, 2021, the Corporation implemented an organizational change to simplify its reportable segments and align its product sales with its end market structure. As a result, the Corporation now operates under the following three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. This change resulted in the transfer of the Corporation's valve-related operations into the new Naval & Power segment. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.

2. REVENUE

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

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.

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

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~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

relative to total estimated costs. If a performance obligation does not qualify for over-time revenue recognition, revenue is then recognized at the point-in-time in which control of the distinct good or service is transferred to the customer, typically based upon the terms of delivery.

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over-time versus at a point-in-time for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020:~~2021:

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Three Months Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Over-time 52 % 54 % 52 % 53 %
Point-in-time 48 % 46 % 48 % 47 %


	Three Months Ended
	March 31,
	2022		2021
Over-time	53	%	52	%
Point-in-time	47	%	48	%

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 ~~$2.2~~$2.3 billion as of ~~June 30, 2021,~~March 31, 2022, of which the Corporation expects to recognize approximately ~~87%~~89% 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	Total Net Sales by End Market and Customer Type	Three Months Ended				Six Months Ended				Total Net Sales by End Market and Customer Type	Three Months Ended
		June 30,				June 30,					March 31,
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
Aerospace & Defense	Aerospace & Defense									Aerospace & Defense
Aerospace Defense	Aerospace Defense	$	99,977	$	109,305	$	210,993	$	211,133	Aerospace Defense	$	98,004	$	111,016
Ground Defense	Ground Defense	48,221		20,029		103,967		42,686		Ground Defense	39,108		55,746
Naval Defense	Naval Defense	177,724		164,941		355,629		330,633		Naval Defense	162,967		177,905
Commercial Aerospace	Commercial Aerospace	71,555		71,084		128,824		171,765		Commercial Aerospace	60,892		57,269
Total Aerospace & Defense		$	397,477	$	365,359	$	799,413	$	756,217
Total Aerospace & Defense customers										Total Aerospace & Defense customers	$	360,971	$	401,936

Commercial	Commercial									Commercial
Power & Process	Power & Process	$	125,333	$	112,787	$	230,837	$	236,713	Power & Process	$	104,788	$	105,504
General Industrial	General Industrial	98,685		71,901		188,304		158,348		General Industrial	93,702		89,619
Total Commercial		$	224,018	$	184,688	$	419,141	$	395,061
Total Commercial customers										Total Commercial customers	$	198,490	$	195,123

Total	Total	$	621,495	$	550,047	$	1,218,554	$	1,151,278	Total	$	559,461	$	597,059

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 Condensed 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. Revenue recognized during the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 included in ~~the~~ contract liabilities ~~balance as~~at the beginning of ~~January 1, 2021~~the respective years was approximately ~~$65~~$79 million and $142 million, respectively. Revenue recognized during the three and six months ended June 30, 2020 included in the contract liabilities balance as of January 1, 2020 was approximately $71 million and $160$77 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

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~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

3. ~~ACQUISITIONS~~ASSETS HELD FOR SALE

~~The~~In January 2022, the Corporation ~~continually evaluates potential acquisitions that either strategically fit within~~completed 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~~sale of its industrial valve business in Germany, which was presented as held for ~~as business combinations and have resulted in the recognition of goodwill~~sale in the Corporation's ~~financial statements. This goodwill arises because~~Consolidated Balance Sheet as of December 31, 2021, for gross cash proceeds of $3 million. The Corporation recorded a loss of $5 million upon sale closing during the ~~acquisition purchase price reflects the future earnings and cash flow potential in excess~~first quarter 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.2022.

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.

4. RECEIVABLES

During the six months ended June 30, 2021, the Corporation did not complete any acquisitions. However, the Corporation paid $5 million during the six months ended June 30, 2021 in regard to prior period acquisitions, which included a working capital adjustment on the acquisition of Pacific Star Communications, Inc. (PacStar), as well as a portion of the purchase price on the acquisition of Dyna-Flo Control Valve Services Ltd. (Dyna-Flo), which was initially held back as security for potential indemnification claims against the seller in accordance with the terms of the Purchase Agreement.

During the six months ended June 30, 2020, the Corporation acquired 2 businesses for an aggregate purchase price of $90 million, which are described in more detail below. The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2020 included $7 million of total net sales and $1 million of net losses from the Corporation's 2020 acquisitions.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the acquisitions consummated during the six months ended June 30, 2020.


~~(In thousands)~~	~~2020~~
~~Accounts receivable~~	$	~~3,204~~
~~Inventory~~	~~10,233~~
~~Property, plant, and equipment~~	~~1,332~~
~~Other current and non-current assets~~	~~188~~
~~Intangible assets~~	~~39,384~~
~~Operating lease right-of-use assets, net~~	~~1,992~~
~~Current and non-current liabilities~~	~~(10,590)~~
~~Net tangible and intangible assets~~	~~45,743~~
~~Goodwill~~	~~43,862~~
~~Total purchase price~~	$	~~89,605~~

~~Goodwill deductible for tax purposes~~	$	~~38,469~~

~~2020 Acquisitions~~

~~PacStar~~

On October 30, 2020, the Corporation acquired 100% of the issued and outstanding stock of PacStar for $406 million. The Purchase Agreement contains a purchase price adjustment mechanism and 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 the seller. PacStar is a provider of tactical communications solutions for battlefield network management. The

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~acquired business operates within the Defense Electronics segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.~~

~~Interactive Analysis and Display System (IADS)~~

~~On April 20, 2020, the Corporation acquired the IADS product line for approximately~~ $29 million. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type. IADS is a real-time display and post-test analysis product for flight tests. The acquired product line operates within the Defense Electronics segment.

~~Dyna-Flo~~

~~On February 28, 2020, the Corporation acquired 100% of the issued and outstanding share capital of Dyna-~~Flo for $60 million, net of cash acquired. The Purchase Agreement contains representations and warranties customary for a transaction of this type, including a portion of the purchase price held back as security for potential indemnification claims against the seller. Dyna-Flo specializes in control valves, actuators, and control systems for the chemical, petrochemical, and oil and gas markets. The acquired business operates within the Naval & Power segment.

~~4. ASSETS HELD FOR SALE~~

During the fourth quarter of 2020, the Corporation committed to a plan to sell its industrial valve business in Germany, which is reported within its Naval & Power segment. The business met the criteria to be classified as held for sale in the fourth quarter of 2020. Accordingly, the assets and liabilities of the business are presented as held for sale in the Corporation's Condensed Consolidated Balance Sheet. The aforementioned assets and liabilities classified as held for sale have been measured at the lower of carrying value or fair value less costs to sell, which resulted in an impairment loss of $33 million in the fourth quarter of 2020. No impairment loss was recorded on the assets or liabilities held for sale during the six months ended June 30, 2021.

~~The aggregate components of assets and liabilities classified as held for sale are as follows:~~

(In thousands) June 30, 2021 December 31, 2020
Assets held for sale:
Receivables, net $ 10,792 $ 9,902
Inventories, net 17,616 16,401
Other current assets 1,845 1,798
Property, plant, and equipment, net 4,606 4,821
Reserve for assets held for sale (5,172) (5,338)
Total assets held for sale, current $ 29,687 $ 27,584
Liabilities held for sale:
Accounts payable $ (3,787) $ (2,654)
Accrued expenses (1,180) (1,375)
Other current liabilities (157) (748)
Accrued pension and other postretirement benefit costs (5,449) (5,364)
Total liabilities held for sale, current $ (10,573) $ (10,141)

~~5. 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. An immaterial amount of unbilled receivables are subject to retainage provisions. The amount of claims and unapproved change orders within our receivables balances are immaterial.

The composition of receivables is as follows:

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~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~


(In thousands)	(In thousands)	June 30, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Billed receivables:	Billed receivables:					Billed receivables:
Trade and other receivables	Trade and other receivables	$	373,222	$	361,460	Trade and other receivables	$	352,905	$	362,007
Unbilled receivables (contract assets):
Unbilled receivables:						Unbilled receivables:
Recoverable costs and estimated earnings not billed	Recoverable costs and estimated earnings not billed	279,753		238,309		Recoverable costs and estimated earnings not billed	314,240		291,758
Less: Progress payments applied	Less: Progress payments applied	(1,538)		(3,291)		Less: Progress payments applied	(1,202)		(1,297)
Net unbilled receivables	Net unbilled receivables	278,215		235,018		Net unbilled receivables	313,038		290,461
Less: Allowance for doubtful accounts	Less: Allowance for doubtful accounts	(7,348)		(7,760)		Less: Allowance for doubtful accounts	(4,814)		(5,320)
Receivables, net	Receivables, net	$	644,089	$	588,718	Receivables, net	$	661,129	$	647,148

6.5. 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 is as follows:


(In thousands)	(In thousands)	June 30, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Raw materials	Raw materials	$	193,066	$	177,828	Raw materials	$	217,900	$	191,066
Work-in-process	Work-in-process	85,377		80,729		Work-in-process	81,618		78,221
Finished goods	Finished goods	120,702		120,767		Finished goods	106,167		98,944
Inventoried costs related to U.S. Government and other long-term contracts (1)	Inventoried costs related to U.S. Government and other long-term contracts (1)	53,603		56,599		Inventoried costs related to U.S. Government and other long-term contracts (1)	47,387		48,619
Inventories, net of reserves	Inventories, net of reserves	452,748		435,923		Inventories, net of reserves	453,072		416,850
Less: Progress payments applied	Less: Progress payments applied	(6,059)		(7,044)		Less: Progress payments applied	(4,950)		(5,283)
Inventories, net	Inventories, net	$	446,689	$	428,879	Inventories, net	$	448,122	$	411,567

(1)~~As of June 30, 2021 and December 31, 2020, this~~ This caption ~~also~~ includes capitalized development costs of ~~$27.5~~$24.9 million ~~and $29.7 million, respectively,~~as of March 31, 2022 related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of ~~June 30, 2021 and December~~March 31, ~~2020,~~2022, capitalized development costs of ~~$12.6~~$17.1 million ~~and $13.0 million, respectively,~~ are not currently supported by existing firm orders.

7.6. GOODWILL

In connection with the change in reportable segments on January 1, 2021, the Corporation recast its previously reported goodwill balances as of December 31, 2020 on a relative fair value basis. As a result, the Corporation performed an interim quantitative impairment assessment as of March 31, 2021 on each of its reporting units, and concluded that no impairment exists. Refer to Note 12 to the Condensed Consolidated Financial Statements for additional information on the Corporation’s reportable segments.

The changes in the carrying amount of goodwill for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 are as follows:
(In thousands) Aerospace & Industrial Defense Electronics Naval & Power Consolidated
December 31, 2020 $ 316,921 $ 703,915 $ 434,301 $ 1,455,137
Adjustments (1)
— 9,845 — 9,845
Foreign currency translation adjustment 650 250 853 1,753
June 30, 2021 $ 317,571 $ 714,010 $ 435,154 $ 1,466,735

~~(1)~~ ~~Amount primarily relates to post-closing adjustments on the Corporation's acquisition of PacStar in October 2020.~~


(In thousands)	Aerospace & Industrial		Defense Electronics		Naval & Power		Consolidated
December 31, 2021	$	316,147	$	714,014	$	432,865	$	1,463,026
Adjustments	—		(469)		—		(469)
Foreign currency translation adjustment	(1,629)		(1,861)		(168)		(3,658)
March 31, 2022	$	314,518	$	711,684	$	432,697	$	1,458,899

87. OTHER INTANGIBLE ASSETS, NET

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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


		June 30, 2021						December 31, 2020							March 31, 2022						December 31, 2021
(In thousands)	(In thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net		(In thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Technology	Technology	$	275,817	$	(157,064)	$	118,753	$	280,595	$	(148,064)	$	132,531	Technology	$	274,264	$	(167,627)	$	106,637	$	274,615	$	(164,077)	$	110,538
Customer related intangibles	Customer related intangibles	570,874		(256,534)		314,340		573,722		(239,798)		333,924		Customer related intangibles	568,019		(277,504)		290,515		568,720		(270,816)		297,904
Programs (1)	Programs (1)	144,000		(23,400)		120,600		144,000		(19,800)		124,200		Programs (1)	144,000		(28,800)		115,200		144,000		(27,000)		117,000
Other intangible assets	Other intangible assets	49,758		(34,847)		14,911		51,493		(32,518)		18,975		Other intangible assets	49,512		(37,951)		11,561		49,559		(36,924)		12,635
Total	Total	$	1,040,449	$	(471,845)	$	568,604	$	1,049,810	$	(440,180)	$	609,630	Total	$	1,035,795	$	(511,882)	$	523,913	$	1,036,894	$	(498,817)	$	538,077

(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program.

Total intangible amortization expense for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 was ~~$30.1~~$14 million, as compared to ~~$28.7~~$15 million in the comparable prior year period. The estimated future amortization expense ~~for~~of intangible assets over the next five years ~~ending December 31, 2021 through 2025~~ is ~~$60 million, $55 million, $52 million, $48 million, and $46 million, respectively.~~as follows:


(In millions)
2022	$	55
2023	$	52
2024	$	48
2025	$	45
2026	$	44

9.8. FAIR VALUE OF FINANCIAL INSTRUMENTS

Forward Foreign Exchange and Currency Option Contracts

The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada. The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions. The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations. Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.

Interest Rate Risks and Related Strategies

The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt.

Effects on Condensed Consolidated Balance Sheets

As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings

Undesignated hedges

The (losses) and gains and ~~losses~~ on forward exchange derivative contracts not designated for hedge accounting are recognized to general and administrative expenses within the Condensed Consolidated Statements of Earnings. The respective (losses) and gains for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021 were immaterial. ~~The gains and (losses) for the three and six months ended June 30, 2020 were $0.7 million and ($7.4) million, respectively.~~

Debt

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of ~~June 30, 2021.~~March 31, 2022. Accordingly, all of the Corporation’s debt is valued as a Level 2 financial instrument. The fair values described below 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.

~~Page 15~~

~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~


		June 30, 2021				December 31, 2020					March 31, 2022				December 31, 2021
(In thousands)	(In thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value		(In thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
3.84% Senior notes due 2021		$	100,000	$	101,125	$	100,000	$	102,173
Revolving credit agreement, due 2023										Revolving credit agreement, due 2023	$	213,900	$	213,900	$	93,900	$	93,900
3.70% Senior notes due 2023	3.70% Senior notes due 2023	202,500		210,302		202,500		211,790		3.70% Senior notes due 2023	202,500		204,456		202,500		208,086
3.85% Senior notes due 2025	3.85% Senior notes due 2025	90,000		96,308		90,000		97,429		3.85% Senior notes due 2025	90,000		90,363		90,000		95,246
4.24% Senior notes due 2026	4.24% Senior notes due 2026	200,000		220,055		200,000		224,390		4.24% Senior notes due 2026	200,000		204,427		200,000		218,421
4.05% Senior notes due 2028	4.05% Senior notes due 2028	67,500		73,758		67,500		75,440		4.05% Senior notes due 2028	67,500		68,571		67,500		73,783
4.11% Senior notes due 2028	4.11% Senior notes due 2028	90,000		98,562		90,000		101,047		4.11% Senior notes due 2028	90,000		91,645		90,000		98,854
3.10% Senior notes due 2030	3.10% Senior notes due 2030	150,000		152,292		150,000		155,805		3.10% Senior notes due 2030	150,000		142,137		150,000		154,832
3.20% Senior notes due 2032	3.20% Senior notes due 2032	150,000		150,877		150,000		155,048		3.20% Senior notes due 2032	150,000		141,071		150,000		154,875
Total debt	Total debt	1,050,000		1,103,279		1,050,000		1,123,122		Total debt	1,163,900		1,156,570		1,043,900		1,097,997
Debt issuance costs, net	Debt issuance costs, net	(1,038)		(1,038)		(1,147)		(1,147)		Debt issuance costs, net	(908)		(908)		(949)		(949)
Unamortized interest rate swap proceeds	Unamortized interest rate swap proceeds	8,542		8,542		9,439		9,439		Unamortized interest rate swap proceeds	7,252		7,252		7,659		7,659
Total debt, net	Total debt, net	$	1,057,504	$	1,110,783	$	1,058,292	$	1,131,414	Total debt, net	$	1,170,244	$	1,162,914	1,050,610		1,104,707

~~10.~~9. PENSION PLANS

Defined Benefit Pension Plans

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s ~~2020~~2021 Annual Report on Form 10-K.

The components of net periodic pension cost ~~for the three and six months ended June 30, 2021 and 2020~~ were as follows:


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
Service cost	Service cost	$	7,120	$	6,611	$	13,990	$	13,222	Service cost	$	6,063	$	6,870
Interest cost	Interest cost	4,511		6,058		8,817		12,116		Interest cost	5,288		4,306
Expected return on plan assets	Expected return on plan assets	(15,191)		(16,896)		(30,371)		(33,792)		Expected return on plan assets	(13,857)		(15,180)
Amortization of prior service cost	Amortization of prior service cost	(369)		(71)		(432)		(142)		Amortization of prior service cost	(86)		(63)
Amortization of unrecognized actuarial loss	Amortization of unrecognized actuarial loss	7,574		5,750		14,717		11,499		Amortization of unrecognized actuarial loss	4,006		7,143
Cost of settlements	Cost of settlements	3,075		0		3,075		0		Cost of settlements	1,842		—
Net periodic pension cost	Net periodic pension cost	$	6,720	$	1,452	$	9,796	$	2,903	Net periodic pension cost	$	3,256	$	3,076

The Corporation ~~does~~did not ~~expect to~~ make any contributions to the Curtiss-Wright Pension Plan during 2021, and does not expect to do so in ~~2021.~~2022. Contributions to the foreign benefit plans are not expected to be material in ~~2021. During the six months ended June 30, 2020, the Corporation made a $150 million voluntary contribution to the Curtiss-Wright Pension Plan.~~2022.

During the three ~~and six~~ months ended ~~June 30, 2021,~~March 31, 2022, the Company recognized a settlement charge related to the retirement of a former executive. The settlement charge represents an event that is accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans.

Defined Contribution Retirement Plan

The Company also maintains a defined contribution plan for all non-union employees who are not currently receiving final or career average pay benefits for its U.S. subsidiaries. The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three and six months ended June 30, 2021, the expense relating to the plan was $4.3 million and $9.6 million, respectively. During the three and six months ended June 30, 2020, the expense relating to the plan was $4.3 million and $10.3 million, respectively. The

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~Corporation made $13.9 million in contributions~~contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three months ended March 31, 2022 and 2021, the expense relating to the plan ~~during the six months ended June 30, 2021,~~was $5.7 million and ~~expects to make total contributions of $19.0~~$5.3 million, ~~in 2021.~~respectively.

~~11.~~10. EARNINGS PER SHARE

Diluted earnings per share was computed based on the weighted-average number of shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:


		Three Months Ended		Six Months Ended			Three Months Ended
		June 30,		June 30,			March 31,
(In thousands)	(In thousands)	2021	2020	2021	2020	(In thousands)	2022	2021
Basic weighted-average shares outstanding	Basic weighted-average shares outstanding	40,915	41,629	40,921	42,092	Basic weighted-average shares outstanding	38,456	40,933
Dilutive effect of stock options and deferred stock compensation		173	226	171	270
Dilutive effect of deferred stock compensation						Dilutive effect of deferred stock compensation	212	170
Diluted weighted-average shares outstanding	Diluted weighted-average shares outstanding	41,088	41,855	41,092	42,362	Diluted weighted-average shares outstanding	38,668	41,103

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, approximately ~~34,000~~26,000 and ~~61,000~~88,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period. ~~There were no anti-dilutive equity-based awards for three and six months ended June 30, 2020.~~

~~12.~~11. SEGMENT INFORMATION

Prior to the first quarter of 2021, the Corporation reported its results of operations through three reportable segments: Commercial/Industrial, Defense, and Power. On January 1, 2021, the Corporation implemented an organizational change to simplify its reportable segments and align its product sales with its end market structure. As a result, the Corporation now reports its results of operations through the following reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.

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, its Chief Executive Officer.

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


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
Net sales	Net sales									Net sales
Aerospace & Industrial	Aerospace & Industrial	$	200,254	$	177,612	$	381,392	$	404,633	Aerospace & Industrial	$	191,850	$	181,138
Defense Electronics	Defense Electronics	163,468		139,927		345,766		280,238		Defense Electronics	143,938		182,298
Naval & Power	Naval & Power	259,496		233,035		495,076		468,049		Naval & Power	225,315		235,580
Less: Intersegment revenues	Less: Intersegment revenues	(1,723)		(527)		(3,680)		(1,642)		Less: Intersegment revenues	(1,642)		(1,957)
Total consolidated	Total consolidated	$	621,495	$	550,047	$	1,218,554	$	1,151,278	Total consolidated	$	559,461	$	597,059

Operating income (expense)	Operating income (expense)									Operating income (expense)
Aerospace & Industrial	Aerospace & Industrial	$	31,977	$	9,615	$	51,002	$	41,755	Aerospace & Industrial	$	24,853	$	19,025
Defense Electronics	Defense Electronics	29,271		24,736		65,894		48,799		Defense Electronics	23,290		36,623
Naval & Power	Naval & Power	43,095		29,146		81,152		57,256		Naval & Power	27,288		38,057
Corporate and other (1)	Corporate and other (1)	(9,760)		(8,148)		(18,399)		(20,015)		Corporate and other (1)	(14,921)		(8,639)
Total consolidated	Total consolidated	$	94,583	$	55,349	$	179,649	$	127,795	Total consolidated	$	60,510	$	85,066

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

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

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
(In thousands)	(In thousands)	2021		2020		2021		2020		(In thousands)	2022		2021
Total operating income	Total operating income	$	94,583	$	55,349	$	179,649	$	127,795	Total operating income	$	60,510	$	85,066
Interest expense	Interest expense	10,180		8,515		20,139		16,004		Interest expense	9,530		9,959
Other income (expense), net		440		(4,105)		5,283		1,427
Other income, net										Other income, net	2,997		4,843
Earnings before income taxes	Earnings before income taxes	$	84,843	$	42,729	$	164,793	$	113,218	Earnings before income taxes	$	53,977	$	79,950


(In thousands)	(In thousands)	June 30, 2021		December 31, 2020		(In thousands)	March 31, 2022		December 31, 2021
Identifiable assets	Identifiable assets					Identifiable assets
Aerospace & Industrial	Aerospace & Industrial	$	1,022,568	$	1,020,294	Aerospace & Industrial	$	1,011,295	$	991,508
Defense Electronics	Defense Electronics	1,551,428		1,542,686		Defense Electronics	1,518,990		1,536,369
Naval & Power	Naval & Power	1,285,349		1,255,325		Naval & Power	1,266,159		1,270,099
Corporate and Other	Corporate and Other	195,953		175,445		Corporate and Other	292,923		294,581
Assets held for sale	Assets held for sale	29,687		27,584		Assets held for sale	—		10,988
Total consolidated	Total consolidated	$	4,084,985	$	4,021,334	Total consolidated	$	4,089,367	$	4,103,545

~~13.~~12. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:


(In thousands)	(In thousands)	Foreign currency translation adjustments, net		Total pension and postretirement adjustments, net		Accumulated other comprehensive income (loss)		(In thousands)	Foreign currency translation adjustments, net		Total pension and postretirement adjustments, net		Accumulated other comprehensive income (loss)
December 31, 2019		$	(130,019)	$	(195,255)	$	(325,274)
Other comprehensive income (loss) before reclassifications (1)		41,282		(44,513)		(3,231)
Amounts reclassified from accumulated other comprehensive loss (1)		0		17,649		17,649
Net current period other comprehensive loss		41,282		(26,864)		14,418
December 31, 2020	December 31, 2020	$	(88,737)	$	(222,119)	$	(310,856)	December 31, 2020	$	(88,737)	$	(222,119)	$	(310,856)
Other comprehensive income (loss) before reclassifications (1)	Other comprehensive income (loss) before reclassifications (1)	3,283		(3,126)		157		Other comprehensive income (loss) before reclassifications (1)	(10,829)		107,211		96,382
Amounts reclassified from accumulated other comprehensive loss (1)	Amounts reclassified from accumulated other comprehensive loss (1)	0		13,168		13,168		Amounts reclassified from accumulated other comprehensive loss (1)	—		24,009		24,009
Net current period other comprehensive income		3,283		10,042		13,325
June 30, 2021		$	(85,454)	$	(212,077)	$	(297,531)
Net current period other comprehensive income (loss)								Net current period other comprehensive income (loss)	(10,829)		131,220		120,391
December 31, 2021								December 31, 2021	$	(99,566)	$	(90,899)	$	(190,465)
Other comprehensive income (loss) before reclassifications (1)								Other comprehensive income (loss) before reclassifications (1)	(6,825)		1,393		(5,432)
Amounts reclassified from accumulated other comprehensive income (loss) (1)								Amounts reclassified from accumulated other comprehensive income (loss) (1)	—		4,373		4,373
Net current period other comprehensive income (loss)								Net current period other comprehensive income (loss)	(6,825)		5,766		(1,059)
March 31, 2022								March 31, 2022	$	(106,391)	$	(85,133)	$	(191,524)

(1) All amounts are after tax.

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


(In thousands)	Amount reclassified from AOCI			Affected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
Amortization of prior service costs	$	~~432~~86	Other income, net
Amortization of actuarial losses	~~(14,717)~~(4,006)		Other income, net
Settlements	~~(3,075)~~(1,842)		Other income, net
	~~(17,360)~~(5,762)		Earnings before income taxes
	~~4,192~~1,389		Provision for income taxes
Total reclassifications	$	~~(13,168)~~(4,373)	Net earnings

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

~~14.~~

13. 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 ~~expect~~believe that ~~such legal proceedings~~the disposition of any of these matters, individually or in the aggregate, will have a material adverse ~~impact~~effect on its condensed consolidated financial ~~statements.~~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 as well as its acquired businesses’ operations and the relatively non-friable condition of asbestos in its historical products makes it unlikely that it will face material liability in any asbestos litigation, whether individually or in the aggregate. The Corporation maintains insurance coverage and indemnification agreements for these potential liabilities and believes adequate coverage exists to cover any unanticipated asbestos liability.

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. As of ~~June 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, there were ~~$23.4~~$19.5 million and $21.1 million of stand-by letters of credit outstanding, ~~respectively,~~respectively. As of March 31, 2022 and ~~$4.7~~December 31, 2021, there were $2.7 million and ~~$5.6~~$4.5 million of bank guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility. The Corporation has provided this financial assurance in the form of a ~~$45.6~~$35.2 million surety bond.

AP1000 Program

~~Within~~In February 2022, the ~~Corporation’s Naval & Power segment, Electro-Mechanical Division (EMD) is the reactor coolant pump (RCP) supplier for the~~Corporation and Westinghouse Electric Company (WEC) ~~AP1000 nuclear power plants in China~~executed a settlement agreement to resolve all open claims and ~~the United States. The terms of~~counterclaims under the AP1000 U.S. and China ~~contracts include liquidated damage provisions for failure to meet contractual delivery dates if~~contracts. Under the terms of the settlement agreement, the Corporation ~~caused~~paid WEC $15 million in March 2022 and is required to pay WEC a final amount of $10 million in the delay and the delay was not excusable. While the Corporation did not meet certain contractual delivery dates under its AP1000 U.S. and China contracts, there are significant counterclaims and uncertainties as to which parties are responsiblefirst quarter of 2023 in exchange for the ~~delay.~~

~~In June~~Corporation’s full release from all open claims under such contracts, whether known or unknown, as well as negotiating and executing a right of first refusal for all future AP1000 projects. As of December 31, 2021, the Corporation and WEC participated in non-binding mediation in an effort to settle all open disputes under the U.S. and China contracts. The mediation efforts were ultimately unsuccessful. WEC has filed a notice of arbitration in regard to the China contract, asserting that it is entitled to liquidated damages of $25 million. Additionally, WEC has also filed claims in Georgia claiming damages on the U.S. contract. The Corporation believes that it has adequate legal defenses and intends to vigorously defend these matters.

As it relates to the U.S. contract, the range of possible loss is $0 to $31 million. The Corporation believes that the likelihood of any potential liability stemming from liquidated damages on the U.S. contract is remote. As it relates to the China contract, the range of possible loss is $0 to $25 million. As of June 30, 2021, the Corporation believes that it iswas adequately accrued regarding this ~~matter, and that the ultimate resolution will not have a significant impact on its condensed consolidated financial statements.~~

~~15. RESTRUCTURING COSTS~~

During the year ended December 31, 2020, the Corporation executed restructuring activities across all of its segments to support its ongoing effort of improving capacity utilization and operating efficiency. These restructuring activities, which included workforce reductions and consolidation of facilities, were substantially completed as of December 31, 2020. As of June 30, 2021 and December 31, 2020, the restructuring liability associated with these restructuring activities was $2.1 million

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~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

and $6.9 million, respectively, with such liability expected to be substantially settled as of December 31, 2021. These balances are reported within Other Current Liabilities on the Condensed Consolidated Balance Sheet.matter.

******

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I- ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Except for historical information, this Quarterly Report on Form 10-Q may be deemed to contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to: (a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from COVID-19, including the impacts to supply and demand, and measures taken by governments and private industry in response, (d) statements of future economic performance and ~~(d)~~ potential impacts due to the conflict between Russia and Ukraine, and (e) statements of assumptions, such as economic conditions underlying other statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy. No assurance may be given that the future results described by the forward-looking statements will be achieved. While we believe these forward-looking statements are reasonable, they are only predictions and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, which could cause actual results, performance, or achievement to differ materially from anticipated future results, performance, or achievement expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” of our ~~2020~~2021 Annual Report on Form 10-K, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission. Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1. Financial Statements and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date they were made, and we assume no obligation to update forward-looking statements to reflect actual results or changes in or additions to the factors affecting such forward-looking statements.

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

COMPANY ORGANIZATION

Curtiss-Wright Corporation is a ~~diversified, multinational provider of~~global integrated business that provides highly engineered ~~technologically advanced, value-added~~ products, solutions, and services mainly to ~~a broad range of industries which are reported~~aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets. We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments. We ~~are positioned as a market leader~~operate across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. ~~We provide products and services to a number of global markets and have achieved balanced growth through the successful application~~Approximately 66% of our core competencies in engineering and precision manufacturing. Our overall strategy is to be a balanced and diversified company, less vulnerable to cycles or downturns in any one market, and to establish strong positions in profitable niche markets. Approximately 55% of our 20212022 revenues are expected to be generated from ~~defense-related~~A&D-related markets.

~~COVID-19~~

In March 2020, the World Health Organization characterized the outbreak of COVID-19 as a pandemic. The pandemic has adversely affected certain elements of our business, including our supply chain, transportation networks, and production ~~levels, due to temporary shutdowns of our customers’ and suppliers’ facilities.~~levels. The extent to which COVID-19 continues to adversely impact our operations depends on future developments, including the impact of the global rollout of COVID-19 vaccines, ~~as well as~~ the emergence and impact of any new COVID-19 ~~variants.~~variants, as well as the issuance of vaccine mandates by the Biden administration. However, given the diversified breadth of our company, we believe that we are well-positioned to mitigate any material risks arising as a result of COVID-19 or any of its variants. From an operational perspective, our current cash balance, coupled with expected cash flows from operating activities for the remainder of the year as well as our current borrowing capacity under the Revolving Credit Agreement, are expected to be more than sufficient to meet operating cash requirements, planned capital expenditures, interest payments on long-term debt obligations, payments on lease obligations, pension and postretirement funding requirements, and dividend payments through the current year and beyond.

RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three ~~and six month periods~~months ended ~~June 30, 2021.~~March 31, 2022. The financial information as of ~~June 30, 2021~~March 31, 2022 should be read in conjunction with the financial statements for the year ended December 31, ~~2020~~2021 contained in our Form 10-K.

The MD&A is organized into the following sections: Condensed Consolidated Statements of Earnings, Results by Business Segment, and Liquidity and Capital Resources. Our discussion will be focused on the overall results of operations followed by a more detailed discussion of those results within each of our reportable segments.

Our three reportable segments are generally concentrated in a few end markets; however, each may have sales across several end markets. An end market is defined as an area of demand for products and services. The sales for the relevant markets will be discussed throughout the MD&A.

On January 1, 2021, the Corporation implemented an organizational change to simplify its reportable segments and align its product sales with its end market structure. As a result, the Corporation operates under the following three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. This change resulted in the transfer of the Corporation's valve-related operations into the Naval & Power segment. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.

Analytical Definitions

Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. Additionally, the results of operations of divested businesses are removed from the comparable prior year period for purposes of calculating “organic” and “incremental” results. The definition of “organic” excludes the loss from sale of our industrial valves business in Germany as well as the effects of ~~restructuring-related expenses and~~ foreign currency translation.

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PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued


Condensed Consolidated Statements of Earnings
	Three Months Ended
	March 31,
(In thousands)	2022		2021		% change
Sales
Aerospace & Industrial	$	191,112	$	180,331	6	%
Defense Electronics	143,069		181,212		(21	%)
Naval & Power	225,280		235,516		(4	%)
Total sales	$	559,461	$	597,059	(6	%)

Operating income
Aerospace & Industrial	$	24,853	$	19,025	31	%
Defense Electronics	23,290		36,623		(36	%)
Naval & Power	27,288		38,057		(28	%)
Corporate and other	(14,921)		(8,639)		(73	%)
Total operating income	$	60,510	$	85,066	(29	%)

Interest expense	9,530		9,959		4	%
Other income, net	2,997		4,843		(38)	%

Earnings before income taxes	53,977		79,950		(32	%)
Provision for income taxes	(13,292)		(20,481)		35	%
Net earnings	$	40,685	$	59,469	(32	%)

New orders	$	634,265	$	579,447	9	%

Components of sales and operating income increase (decrease):


	Three Months Ended
	March 31,
	2022 vs. 2021
	Sales		Operating Income
Organic	(6	%)	(22	%)
Acquisitions	—	%	—	%
Loss on divestiture	—	%	(6	%)
Foreign currency	—	%	(1	%)
Total	(6	%)	(29	%)

Sales during the three months ended March 31, 2022 decreased $38 million, or 6%, to $559 million, compared with the prior year period. On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased $38 million and $11 million, respectively, with sales from the Aerospace & Industrial segment increasing $11 million. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income during the three months ended March 31, 2022 decreased $25 million, or 29%, to $61 million, compared with the prior year period, while operating margin decreased 340 basis points to 10.8%, compared with the same period in 2021. In the Defense Electronics segment, decreases in operating income and operating margin were primarily due to unfavorable overhead absorption on lower sales as well as unfavorable mix, which more than offset the benefits of our ongoing

Page 19

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

Condensed Consolidated Statements of Earnings
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands) 2021 2020 % change 2021 2020 % change
Sales
Aerospace & Industrial $ 199,713 $ 177,411 13 % $ 380,044 $ 404,139 (6 %)
Defense Electronics 162,351 139,613 16 % 343,563 279,194 23 %
Naval & Power 259,431 233,023 11 % 494,947 467,945 6 %
Total sales $ 621,495 $ 550,047 13 % $ 1,218,554 $ 1,151,278 6 %
Operating income
Aerospace & Industrial $ 31,977 $ 9,615 233 % $ 51,002 $ 41,755 22 %
Defense Electronics 29,271 24,736 18 % 65,894 48,799 35 %
Naval & Power 43,095 29,146 48 % 81,152 57,256 42 %
Corporate and other (9,760) (8,148) (20 %) (18,399) (20,015) 8 %
Total operating income $ 94,583 $ 55,349 71 % $ 179,649 $ 127,795 41 %
Interest expense 10,180 8,515 (20 %) 20,139 16,004 (26 %)
Other income (expense), net 440 (4,105) 111 % 5,283 1,427 270 %
Earnings before income taxes 84,843 42,729 99 % 164,793 113,218 46 %
Provision for income taxes (23,435) (11,711) (100 %) (43,916) (30,439) (44 %)
Net earnings $ 61,408 $ 31,018 $ 120,877 $ 82,779
Restructuring-related expenses $ — $ 14,596 NM $ — $ 17,380 NM
New orders $ 689,728 $ 620,249 11 % $ 1,269,175 $ 1,190,050 7 %

~~Components of sales and operating income increase (decrease):~~
Three Months Ended Six Months Ended
June 30, June 30,
2021 vs. 2020 2021 vs. 2020
Sales Operating Income Sales Operating Income
Organic 6 % 46 % (1 %) 26 %
Acquisitions 6 % 4 % 6 % 4 %
Restructuring — % 26 % — % 14 %
Foreign currency 1 % (5 %) 1 % (3 %)
Total 13 % 71 % 6 % 41 %

~~Sales~~ in the second quarter increased $71 million, or 13%, to $621 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $22 million, $23 million, and $26 million, respectively.

Sales during the six months ended June 30, 2021 increased $67 million, or 6%, to $1,219 million, compared with the prior year period. On a segment basis, sales from the Defense Electronics and Naval & Power segments increased $64 million and $27

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~~MANAGEMENT’S DISCUSSION and ANALYSIS of~~

~~FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued~~

million, respectively, with sales from the Aerospace & Industrial segment decreasing $24 million. Changes in sales by segment are discussed in further detail in the results by business segment section below.

~~Operating income~~ in the second quarter increased $39 million, or 71%, to $95 million, and operating margin increased 510 basis points to 15.2% compared with the same period in 2020. In the Aerospace & Industrial segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales in the general industrial market, as well as the benefits from our ongoing operational excellence ~~and prior year restructuring~~ initiatives. Operating income and operating margin in the ~~Defense Electronics~~Naval & Power segment ~~also benefited from~~decreased primarily due to a loss on sale of our ~~operational excellence initiatives, as well as~~industrial valves business in Germany, unfavorable overhead absorption on lower sales in the ~~incremental impact from our PacStar acquisition.~~naval defense market, and unfavorable mix in the power & process market. These ~~increases~~decreases were partially offset by ~~unfavorable mix in defense electronics and higher research and development costs. In the Naval & Power segment,~~ increases in operating income and operating margin ~~were~~in the Aerospace & Industrial segment, primarily due to favorable ~~overhead~~ absorption on higher sales, as well as ~~current year savings recognized as a result~~the benefits of ~~our prior year restructuring initiatives.~~

~~Operating income during the six months ended June 30, 2021~~ ~~increased $52 million, or 41%, to $180 million and operating margin increased 360 basis points to 14.7%, compared with the same period in 2020.~~ ~~In the Aerospace & Industrial segment, increases in operating income and operating margin were primarily due to the benefits from~~ our ongoing operational excellence and prior year restructuring initiatives. Operating income and operating margin in the Defense Electronics segment benefited from our operational excellence initiatives, the incremental impact from our PacStar acquisition, as well as the absence of first year purchase accounting costs from our 901D acquisition. These increases were partially offset by higher research and development costs and unfavorable foreign currency translation. In the Naval & Power segment, increases in operating income and operating margin were primarily due to favorable overhead absorption as well as current year savings recognized as a result of our prior year restructuring initiatives.

Non-segment operating expense induring the ~~second quarter~~three months ended March 31, 2022 increased $2$6 million, or ~~20%~~73%, to ~~$10~~$15 million, primarily due to ~~higher environmental and other corporate costs. Non-segment operating expense during~~costs associated with shareholder activism in the ~~six months ended June 30, 2021 decreased $2 million,~~ ~~or 8%,~~ ~~to $18 million, primarily due to lower foreign exchange losses.~~current period.

Interest expense ~~in the second quarter and six months ended June 30, 2021 increased $2~~of $10 million ~~or 20%, to $10 million, and~~ ~~$4 million, or 26%, to $20 million, respectively, primarily due~~was essentially flat compared to the ~~issuance of $300 million Senior Notes in August 2020.~~prior year period.

Other income, net induring the ~~second quarter and six~~three months ended ~~June 30, 2021 increased $5~~March 31, 2022 decreased $2 million, or ~~111%~~38%, to $1$3 million, ~~and $4 million, or 270%, to $5 million, respectively,~~ primarily due to the prior year recognition of accumulated foreign currency translation losses of $10 million related to the substantial liquidation of our Norwegian subsidiary. These increases were partially offset by a one-time pension settlement ~~charge~~charges recognized in the current period related to the retirement of a former ~~executive, which was recognized in the current period.~~executive.

The effective tax rate of 27.6% in the second quarter increased compared to an effective tax rate of 27.4% in the prior year period. This increase was primarily driven by a provisional charge related to the remeasurement of deferred tax liabilities due to a corporate tax rate change in the United Kingdom. The effective tax rate of 26.6% for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 of 24.6% decreased as compared to an effective tax rate of ~~26.9%, primarily due to the recognition of accumulated foreign currency translation losses~~25.6% in the prior year period, ~~related~~primarily due to higher stock compensation benefits in the ~~substantial liquidation of our Norwegian subsidiary, which are not deductible for tax purposes.in the prior year~~current period.

Comprehensive incomein for the ~~second quarter~~three months ended March 31, 2022 was ~~$73~~$40 million, compared to comprehensive income of ~~$59~~$61 million in the prior year period. The change was primarily due to the following:

•Net earnings ~~increased $30~~decreased $19 million, primarily due to ~~higher~~lower operating income.

•Foreign currency translation adjustments infor the ~~second quarter~~three months ended March 31, 2022 resulted in a $7 million comprehensive ~~gain,~~loss, compared to a ~~$24 million comprehensive gain in the prior year period. The comprehensive gain during the current period was primarily attributed to increases in the Canadian dollar.~~

Comprehensive income during the six months ended June 30, 2021 was $134 million, compared to comprehensive income of $65 million in the prior year period. The change was primarily due to the following:

•~~Net earnings increased $38 million, primarily due to higher operating income.~~

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~~FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued~~

•~~Foreign currency translation adjustments for the six months ended June 30, 2021 resulted in a $3 million comprehensive gain, compared to a $26~~$4 million comprehensive loss in the prior period. The comprehensive ~~gain~~loss during the current period was primarily attributed to ~~increases~~decreases in the ~~Canadian dollar.~~British Pound.

New orders inincreased $55 million during the ~~second quarter and six~~three months ended ~~June 30, 2021 increased $69 million and $79 million, respectively,~~March 31, 2022 from the comparable prior year ~~periods,~~period, primarily duedue to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for industrial vehicles and ~~sensors and actuation equipment i~~ncommercial aerospace products in the Aerospace & Industrial ~~segment, as well as the~~ ~~incremental impact of our PacStar acquisition in the Defense Electronics segment~~.segment. These increases were partially offset by the timing of ~~naval defense~~ orders across all defense-related markets in the ~~Naval & Power segment.~~Defense Electronics segment due to ongoing supply chain disruption. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

RESULTS BY BUSINESS SEGMENT

Aerospace & Industrial

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


	Three Months Ended
	March 31,
(In thousands)	2022			2021			% change
Sales	$	191,112		$	180,331		6	%
Operating income	24,853			19,025			31	%
Operating margin	13.0		%	10.6		%	240	bps
New orders	$	228,314		$	199,115		15	%

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Three Months Ended Six Months Ended
June 30, June 30,
(In thousands) 2021 2020 % change 2021 2020 % change
Sales $ 199,713 $ 177,411 13 % $ 380,044 $ 404,139 (6 %)
Operating income 31,977 9,615 233 % 51,002 41,755 22 %
Operating margin 16.0 % 5.4 % 1,060 bps 13.4 % 10.3 % 310 bps
Restructuring-related expenses $ — $ 5,586 NM $ — $ 5,870 NM
New orders $ 222,825 $ 121,068 84 % $ 421,940 $ 325,407 30 %
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

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Components of sales and operating income increase (decrease):


		Three Months Ended				Six Months Ended					Three Months Ended
		June 30,				June 30,					March 31,
		2021 vs. 2020				2021 vs. 2020					2022 vs. 2021
		Sales		Operating Income		Sales		Operating Income			Sales		Operating Income
Organic	Organic	10	%	174	%	(8	%)	8	%	Organic	7	%	33	%
Acquisitions	Acquisitions	—	%	—	%	—	%	—	%	Acquisitions	—	%	—	%
Restructuring		—	%	59	%	—	%	14	%
Foreign currency	Foreign currency	3	%	—	%	2	%	—	%	Foreign currency	(1	%)	(2	%)
Total	Total	13	%	233	%	(6	%)	22	%	Total	6	%	31	%

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

Sales in the second quarter increased $22 million, or 13%, to $200 million from the prior year period. Sales in the general industrial market increased $25 million, primarily due to higher industrial vehicle sales. This increase was partially offset by lower sales in the commercial aerospace market, primarily due to the exit of our build-to-print product line in the fourth quarter of 2020.

Sales during the ~~six~~three months ended ~~June 30, 2021 decreased $24~~March 31, 2022 increased $11 million, or 6%, to ~~$380~~$191 million from the prior year period, primarily due to the impact of the COVID-19 pandemic on the commercial aerospace market. In the commercial aerospace market, sales decreased $50 million, the majority of which occurred in the first quarter of 2021 due to lowerhigher demand for actuation and sensors ~~equipment~~products as well as surface treatment ~~services. Sales~~services on narrow-body platforms in the commercial aerospace ~~market~~market. Sales also benefited from higher demand for industrial vehicle products in the general industrial market.

Operating income increased $6 million, or 31%, to $25 million during the three months ended March 31, 2022 compared to the prior year period, while operating margin increased 240 basis points to 13.0%. The increases in operating income and operating margin were ~~also negatively impacted by~~primarily due to favorable overhead absorption on higher sales, as well as the ~~exit~~benefits of our ~~build-to-print product line~~ongoing operational excellence initiatives.

New orders during the three months ended March 31, 2022 increased $29 million from the comparable prior year period, primarily due to an increase in new orders for industrial vehicles and commercial aerospace equipment.

Defense Electronics

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


	Three Months Ended
	March 31,
(In thousands)	2022			2021			% change
Sales	$	143,069		$	181,212		(21	%)
Operating income	23,290			36,623			(36	%)
Operating margin	16.3		%	20.2		%	(390	bps)
New orders	$	159,688		$	182,300		(12	%)

Components of ~~2020. These decreases were partially~~sales and operating income increase (decrease):


	Three Months Ended
	March 31,
	2022 vs. 2021
	Sales		Operating Income
Organic	(21	%)	(37	%)
Acquisitions	—	%	—	%
Foreign currency	—	%	1	%
Total	(21	%)	(36	%)

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~~offset by sales increases of $28 million in the general industrial market, primarily due to higher demand for industrial vehicle products and surface treatment services.~~

~~Operating income~~ in the second quarter increased $22 million, or 233%, to $32 million from the prior year period, and operating margin increased 1,060 basis points to 16.0%. The increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales in the general industrial market, as well as the benefits from our ongoing operational excellence and prior year restructuring initiatives.

Operating income during the six months ended June 30, 2021 increased $9 million, or 22%, to $51 million from the prior year period, and operating margin increased 310 basis points to 13.4%. The increases in operating income and operating margin were primarily due to current year savings recognized as a result of our ongoing operational excellence and prior year restructuring initiatives.

~~New orders~~ ~~in the second quarter and six months ended June 30, 2021 increased $102 million and $97 million, respectively, from the comparable prior year periods, primarily due to an increase in new orders for~~ ~~industrial vehicles and sensors and actuation equipment.~~

~~Defense Electronics~~

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

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands) 2021 2020 % change 2021 2020 % change
Sales $ 162,351 $ 139,613 16 % $ 343,563 $ 279,194 23 %
Operating income 29,271 24,736 18 % 65,894 48,799 35 %
Operating margin 18.0 % 17.7 % 30 bps 19.2 % 17.5 % 170 bps
Restructuring-related expenses $ — $ 1,671 NM $ — $ 2,470 NM
New orders $ 174,791 $ 165,995 5 % $ 357,091 $ 313,896 14 %

~~Components of sales and operating income increase (decrease):~~
Three Months Ended Six Months Ended
June 30, June 30,
2021 vs. 2020 2021 vs. 2020
Sales Operating Income Sales Operating Income
Organic (6 %) 12 % (1 %) 26 %
Acquisitions 22 % 9 % 23 % 12 %
Restructuring — % 7 % — % 5 %
Foreign currency — % (10 %) 1 % (8 %)
Total 16 % 18 % 23 % 35 %

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

Sales induring the ~~second quarter increased $23~~three months ended March 31, 2022 decreased $38 million, or ~~16%~~21%, to ~~$162~~$143 million from the prior year period, primarily due to ~~higher sales in the ground~~timing across all defense ~~and commercial aerospace~~ markets. ~~Sales in~~In the ground defense market, ~~increased $28~~sales decreased $17 million primarily due to ongoing supply chain headwinds, which contributed to lower sales of embedded computing and tactical communications equipment on various programs. Sales in the aerospace defense market decreased $14 million primarily due to the ~~incremental impact~~delayed signing of ~~our PacStar acquisition.~~ In the ~~commercial aerospace market,~~FY22 defense budget, which resulted in lower sales ~~increased $7 million due to higher demand for avionics and flight test~~of embedded computing equipment on various ~~domestic~~programs. Sales in the naval defense market were negatively impacted by the timing of orders on various submarine and ~~international platforms. Thes~~surface combat ship programs.

Operating income~~e increases~~ during the three months ended March 31, 2022 decreased $13 million, or 36%, to $23 million, and operating margin decreased 390 basis points from the prior year period to 16.3%. The decreases in operating income and operating margin were ~~partially offset by~~primarily due to unfavorable overhead absorption on lower sales ~~of $13~~and unfavorable mix.

New orders during the three months ended March 31, 2022 decreased $23 million infrom the ~~aerospace defense market,~~comparable prior year period, primarily due to the timing of orders ~~for embedded computing equipment~~across all defense-related markets due to ongoing supply chain disruption.

Naval & Power

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


	Three Months Ended
	March 31,
(In thousands)	2022			2021			% change
Sales	$	225,280		$	235,516		(4	%)
Operating income	27,288			38,057			(28	%)
Operating margin	12.1		%	16.2		%	(410	bps)
New orders	$	246,263		$	198,032		24	%

Components of sales and operating income increase (decrease):


	Three Months Ended
	March 31,
	2022 vs. 2021
	Sales		Operating Income
Organic	(4	%)	(14	%)
Acquisitions	—	%	—	%
Loss on divestiture	—	%	(14	%)
Foreign currency	—	%	—	%
Total	(4	%)	(28	%)

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

Sales during the three months ended March 31, 2022 decreased $11 million, or 4%, to $225 million from the prior year period. In the naval defense market, sales decreased $6 million primarily due to lower sales on ~~various domestic programs.~~the CVN-80 aircraft carrier and Virginia-class submarine programs, partially offset by higher demand on the Columbia-class submarine program. In the power & process market, higher nuclear aftermarket sales were more than offset by the wind down on the China Direct AP1000 program.

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Sales during the six months ended June 30, 2021 increased $64 million, or 23%, to $344 million from the prior year period, primarily due to the incremental impact of our PacStar acquisition in the ground defense market, which contributed sales of $64 million.

Operating income induring the ~~second quarter increased $5~~three months ended March 31, 2022 decreased $11 million, or ~~18%~~28%, to $29 million compared to the prior year period, and operating margin increased 30 basis points from the prior year period to 18.0%. Operating income during the six months ended June 30, 2021 increased $17 million, or 35%, to $66 million, while operating margin increased 170 basis points from the prior year period to 19.2%. The increases in operating income and operating margin for each of the respective periods were primarily due to the benefits from our ongoing operational excellence and prior year restructuring initiatives, the incremental impact of our PacStar acquisition, as well as the absence of first year purchase accounting costs from our 901D acquisition. These increases were partially offset by unfavorable mix in defense electronics and higher research and development costs.

~~New orders~~ in~~the second quarter and six months ended June 30, 2021 increased $9 million and $43 million, respectively, from the comparable prior year periods,~~ ~~primarily due to the incremental impact of our PacStar acquisition. These increases were partially offset by the timing of naval defense and aerospace defense orders.~~

~~Naval & Power~~

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

Three Months Ended Six Months Ended
June 30, June 30,
(In thousands) 2021 2020 % change 2021 2020 % change
Sales $ 259,431 $ 233,023 11 % $ 494,947 $ 467,945 6 %
Operating income 43,095 29,146 48 % 81,152 57,256 42 %
Operating margin 16.6 % 12.5 % 410 bps 16.4 % 12.2 % 420 bps
Restructuring-related expenses $ — $ 7,339 NM $ — $ 9,040 NM
New orders $ 292,112 $ 333,186 (12 %) $ 490,144 $ 550,747 (11 %)

~~Components of sales and operating income increase (decrease):~~
Three Months Ended Six Months Ended
June 30, June 30,
2021 vs. 2020 2021 vs. 2020
Sales Operating Income Sales Operating Income
Organic 10 % 24 % 4 % 28 %
Acquisitions — % — % — % — %
Restructuring — % 26 % — % 16 %
Foreign currency 1 % (2 %) 2 % (2 %)
Total 11 % 48 % 6 % 42 %

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

Sales in the second quarter increased $26 million, or 11%, to $259 million from the prior year period, primarily due to higher sales in the naval defense and power & process markets. In the naval defense market, sales increased $14 million primarily due to higher production on the CVN-80 and CVN-81 aircraft carrier programs as well as higher service center sales. In the power & process market, sales increased $12 million primarily due to higher nuclear aftermarket sales and increased demand for industrial valve products.

~~Sales during the six months ended June 30, 2021 increased~~ $27 ~~million, or 6%, to $495 million from the prior year period. In the naval defense market, sales increased $32 million primarily due to increased production on the CVN-81 aircraft carrier~~

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~~FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued~~

program as well as higher service center and foreign military sales. This increase was partially offset by lower sales in the power & process market primarily due to lower sales of industrial valve products.

~~Operating income~~ ~~in the second quarter increased $14 million, or 48%, to $43~~ million, and operating margin ~~increased~~decreased 410 basis points from the prior year period to ~~16.6%. Operating income during the six months ended June 30, 2021 increased $24 million, or 42%, to $81 million, and operating margin increased 420 basis points from the prior year period to 16.4%~~12.1%. The ~~increases~~decreases in operating income and operating margin ~~for each of the respective periods~~ were primarily due to ~~favorable~~a loss on sale of our industrial valves business in Germany, unfavorable overhead absorption on ~~higher~~lower sales ~~as well as current year savings recognized as a result of our prior year restructuring initiatives. Operating income~~in the naval defense market, and ~~operating margin during~~unfavorable mix in the ~~six months ended June 30, 2021 also benefited from the absence of prior period transition costs associated with our DRG facility.~~power & process market.

New orders inincreased $48 million during the ~~second quarter and six~~three months ended ~~June 30, 2021decreased $41 million and $61 million, respectively,~~March 31, 2022 from the comparable prior year ~~periods,~~period, primarily due to the timing of naval defense orders.

SUPPLEMENTARY INFORMATION

The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our ~~consolidated~~ operating results.


Total Net Sales by End Market and Customer Type		Three Months Ended						Six Months Ended
Net Sales by End Market and Customer Type														Net Sales by End Market and Customer Type	Three Months Ended
		June 30,						June 30,							March 31,
(In thousands)	(In thousands)	2021		2020		% change		2021		2020		% change		(In thousands)	2022		2021		% change
Aerospace & Defense markets:	Aerospace & Defense markets:													Aerospace & Defense markets:
Aerospace Defense	Aerospace Defense	$	99,977	$	109,305	(9	%)	$	210,993	$	211,133	—	%	Aerospace Defense	$	98,004	$	111,016	(12	%)
Ground Defense	Ground Defense	48,221		20,029		141	%	103,967		42,686		144	%	Ground Defense	39,108		55,746		(30	%)
Naval Defense	Naval Defense	177,724		164,941		8	%	355,629		330,633		8	%	Naval Defense	162,967		177,905		(8	%)
Commercial Aerospace	Commercial Aerospace	71,555		71,084		1	%	128,824		171,765		(25	%)	Commercial Aerospace	60,892		57,269		6	%
Total Aerospace & Defense	Total Aerospace & Defense	$	397,477	$	365,359	9	%	$	799,413	$	756,217	6	%	Total Aerospace & Defense	$	360,971	$	401,936	(10	%)

Commercial markets:	Commercial markets:													Commercial markets:
Power & Process	Power & Process	$	125,333	$	112,787	11	%	$	230,837	$	236,713	(2	%)	Power & Process	104,788		105,504		(1	%)
General Industrial	General Industrial	98,685		71,901		37	%	188,304		158,348		19	%	General Industrial	93,702		89,619		5	%
Total Commercial	Total Commercial	$	224,018	$	184,688	21	%	$	419,141	$	395,061	6	%	Total Commercial	$	198,490	$	195,123	2	%

Total Curtiss-Wright	Total Curtiss-Wright	$	621,495	$	550,047	13	%	$	1,218,554	$	1,151,278	6	%	Total Curtiss-Wright	$	559,461	$	597,059	(6	%)

Aerospace & Defense markets

Sales induring the ~~second quarter increased $32~~three months ended March 31, 2022 decreased $41 million, or 9%10%, to ~~$397~~$361 million, ~~against the comparable prior year period,~~ primarily due to ~~higher~~lower sales in the aerospace defense, ground defense, and naval defense markets. ~~The~~Sales in the aerospace defense and ground defense ~~market benefited from the impact~~markets decreased primarily due to timing of ~~our PacStar acquisition, which contributed incremental~~ sales of ~~$31 million.~~embedded computing and tactical communications equipment on various programs. Sales decreases in the naval defense market ~~increased~~were primarily due to h~~igher production~~lower sales on the CVN-80 ~~and CVN-81~~ aircraft carrier and Virginia-class submarine programs,~~. These increases were~~ partially offset by ~~the timing of orders for embedded computing equipment on various domestic programs in the aerospace defense market.~~

~~Sales during the six months ended June 30, 2021 increased $43 million, or 6%, to $799 million, primarily due to~~ higher sales in the ground defense and naval defense markets. The ground defense market benefited from the impact of our PacStar acquisition, which contributed incremental sales of $64 million. In the naval defense market, sales benefited from ~~increased production~~demand on the ~~CVN-81 aircraft carrier program as well as higher service center and foreign military sales.~~Columbia-class submarine program. ~~These increases were partially offset by lower sales in the commercial aerospace market during the first quarter of 2021~~ ~~due to a~~ ~~pandemic-driven decline in demand for sensors products and surface treatment services.~~ ~~Sales in the commercial aerospace market were also negatively impacted by the exit of our build-to-print product line in the fourth quarter of 2020.~~

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~~FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued~~

Commercial markets

Sales induring the ~~second quarter~~three months ended March 31, 2022 increased ~~$39~~$3 million, or ~~21%~~2%, to $224 million primarily due to higher sales in both the general industrial and power & process markets. In the general industrial market, sales benefited from higher demand for industrial vehicle products and surface treatment services. In the power & process market, sales increased primarily due to higher nuclear aftermarket sales and increased demand for industrial valve products.

~~Sales during the six months ended June 30, 2021 increased $24 million, or 6%, to $419~~$198 million, primarily due to higher demand for ~~our~~ industrial vehicle products in the general industrial market. ~~This increase was partially offset by lower sales in the power & process market primarily due to lower sales of industrial valve products.~~

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

We derive the majority of our operating cash inflow from receipts on the sale of goods and services and cash outflow for the procurement of materials and labor; cash flow is therefore subject to market fluctuations and conditions. Most of our long-term contracts allow for several billing points (progress or milestone) that provide us with cash receipts as costs are incurred throughout the project rather than upon contract completion, thereby reducing working capital requirements. In some cases, these payments can exceed the costs incurred on a project. Management continually evaluates cash utilization alternatives,

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including share repurchases, acquisitions, increased dividends, and paying down debt, to determine the most beneficial use of available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets, are sufficient to meet both the short-term and long-term capital needs of the organization.


Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows	Six Months Ended				Condensed Consolidated Statements of Cash Flows	Three Months Ended
(In thousands)	(In thousands)	June 30, 2021		June 30, 2020		(In thousands)	March 31, 2022		March 31, 2021
Cash provided by (used in):	Cash provided by (used in):					Cash provided by (used in):
Operating activities	Operating activities	$	48,476	$	(52,209)	Operating activities	$	(124,315)	$	(26,603)
Investing activities	Investing activities	(20,129)		(108,916)		Investing activities	(10,391)		(12,855)
Financing activities	Financing activities	(26,899)		(51,942)		Financing activities	106,179		(7,107)
Effect of exchange-rate changes on cash	Effect of exchange-rate changes on cash	(2,188)		(22,583)		Effect of exchange-rate changes on cash	(5,795)		(4,614)
Net decrease in cash and cash equivalents	Net decrease in cash and cash equivalents	(740)		(235,650)		Net decrease in cash and cash equivalents	(34,322)		(51,179)

Net cash ~~provided by~~used in operating activities increased ~~$101~~$98 million from the prior year period, primarily due to ~~a prior year voluntary pension contribution of $150 million and higher~~lower net earnings, ~~during~~higher inventory receipts, the ~~current period. This increase was partially offset by higher outstanding receivables~~timing of advanced cash receipts, and a legal settlement payment made to WEC during the current period.

Net cash used in investing activities decreased~~$89~~ $2 million from the ~~comparable~~ prior year period, primarily due to ~~prior period acquisitions and lower~~higher current period ~~capital expenditures. The Corporation acquired two businesses during~~proceeds from disposal of long-lived assets.

Net cash provided by financing activities increased $113 million from the six months ended June 30, 2020 for approximately $90 million. The Corporation did not make any acquisitions during the six months ended June 30, 2021. Capital expenditures for the six months ended June 30, 2021 and June 30, 2020 were $18 million and $29 million, respectively, with the decreaseprior year period, primarily due to ~~lower capital spending during the~~higher current period ~~as well as lower current period investment related~~net borrowings of $120 million under our revolving credit facility. Refer to the ~~new DRG facility.~~"Financing Activities" section below for further details.

Financing Activities

Debt

The Corporation’s debt outstanding had an average interest rate of ~~3.5% for both the three~~3.2% and ~~six months ended June 30, 2021, and 3.3% and 3.4%~~3.5% for the three ~~and six~~ months ended ~~June 30, 2020,~~March 31, 2022 and 2021, respectively. The Corporation’s average debt outstanding was ~~$1,062~~$1,112 million and ~~$1,059~~$1,057 million for the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively, and $890 million and $842 million for the three and six months ended June 30, 2020,~~ respectively.

~~Page 29~~

~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~PART I - ITEM 2~~

~~MANAGEMENT’S DISCUSSION and ANALYSIS of~~

~~FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued~~

Credit Agreement

As of ~~June 30, 2021,~~March 31, 2022, the Corporation had no$214 million of outstanding borrowings under the ~~2018~~2012 Senior Unsecured Revolving Credit Agreement (the “Credit Agreement” or “credit facility”) and ~~$23~~approximately $19 million in letters of credit supported by the credit facility. The unused credit available under the Credit Agreement as of ~~June 30, 2021~~March 31, 2022 was ~~$477~~$267 million which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the ~~six~~three months ended ~~June 30, 2021,~~March 31, 2022, the Corporation used ~~$24~~$19 million of cash to repurchase approximately ~~0.2~~0.1 million outstanding shares under its share repurchase program. During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the Corporation used ~~$125~~$12 million of cash to repurchase approximately ~~1.2~~0.1 million outstanding shares under its share repurchase program.

Cash Utilization

Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends to determine the most beneficial use of available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.

Page 24

~~Dividends~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

~~The Corporation made dividend payments of $7 million during both the six months ended June 30, 2021 and June 30, 2020.~~

Debt Compliance

As of the date of this report, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization limit of 60%. The debt to capitalization limit is a measure of our indebtedness (as defined per the notes purchase agreement and credit facility) to capitalization, where capitalization equals debt plus equity, and is the same for and applies to all of our debt agreements and credit facility.

As of ~~June 30, 2021,~~March 31, 2022, we had the ability to borrow additional debt of ~~$1.7~~$1.5 billion without violating our debt to capitalization covenant.

Page 3025

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

PART I - ITEM 2

MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

CRITICAL ACCOUNTING POLICIES

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by the application of our accounting policies. Critical accounting policies are those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our ~~2020~~2021 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February ~~25, 2021,~~24, 2022, in the Notes to the Consolidated Financial Statements, Note 1, and the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Page 3126

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Information regarding market risk and market risk management policies is more fully described in "Item 7A. Quantitative and Qualitative Disclosures about Market Risk" of our ~~2020~~2021 Annual Report on Form 10-K.

Item 4. CONTROLS AND PROCEDURES

As of ~~June 30, 2021,~~March 31, 2022, our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of ~~June 30, 2021~~March 31, 2022 insofar as they are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and they include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

During the quarter ended ~~June 30, 2021,~~March 31, 2022, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Page 3227

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

InFrom time to time, we are involved in legal proceedings that are incidental to the ~~ordinary course~~operation of ~~business,~~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. We continue to defend vigorously against all claims. Although the ~~Corporation~~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 ~~its subsidiaries are subject to various pending claims, lawsuits, and contingent liabilities. We~~insurance coverage, we do not believe that the disposition of any of these matters, individually or in the aggregate, will have a material adverse effect on our condensed consolidated financial condition, results of operations, and cash flows.

We have been named in pending lawsuits that allege injury from exposure to asbestos. To date, we have not been found liable or paid any material sum of money in settlement in any asbestos-related case. We believe that the minimal use of asbestos in our past operations ~~as well as our acquired businesses~~ and the relatively non-friable condition of asbestos in our ~~historical~~ products make it unlikely that we will face material liability in any asbestos litigation, whether individually or in the aggregate. We maintain insurance coverage ~~and indemnification agreements~~ for these potential liabilities and we believe adequate coverage exists to cover any unanticipated asbestos liability.

Item 1A. RISK FACTORS

There have been no material changes in our Risk Factors during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Information regarding our Risk Factors is more fully described in "Item 1A. Risk Factors" of our ~~2020~~2021 Annual Report on Form 10-K.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended ~~June 30, 2021.~~March 31, 2022.

Total Number of shares purchased Average Price Paid per Share Total Number of Shares Purchased as Part of a Publicly Announced Program Maximum Dollar amount of shares that may yet be Purchased Under the Program
April 1 - April 30 33,899 123.88 136,034 $ 184,140,677
May 1 - May 31 31,438 127.21 167,472 180,141,506
June 1 - June 30 35,374 124.38 202,846 175,741,703
For the quarter ended June 30, 2021 100,711 125.10 202,846 $ 175,741,703


	Total Number of shares purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program	Maximum Dollar amount of shares that may yet be Purchased Under the Program
January 1 - January 31	75,510	$	138.61	75,510	$	246,542,772
February 1 - February 28	28,146	$	134.90	103,656	$	242,745,897
March 1 - March 31	30,496	$	150.70	134,152	$	238,150,044
For the quarter ended March 31, 2022	134,152	$	140.58	134,152	$	238,150,044

In ~~October 2020,~~December 2021, the Corporation ~~announced that~~adopted two written trading plans in connection with its ~~Board~~previously authorized share repurchase program, which allowed for the purchase of ~~Directors has authorized an additional $200~~its outstanding common stock up to $550 million, of which $238 million remains available for ~~future~~repurchase as of March 31, 2022. The first trading plan includes share ~~repurchases. The Corporation plans to repurchase at least~~repurchases of $50 million, ~~of its common stock via~~to be executed equally throughout the 2022 calendar year. The second trading plan, which included opportunistic share repurchases up to $100 million and executed through a 10b5-1 program, ~~during the 2021 calendar year.~~was completed as of December 31, 2021.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. OTHER INFORMATION

Page 28

There have been no material changes in our procedures by which our security holders may recommend nominees to our board of directors during the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. Information regarding security holder recommendations and nominations for directors is more fully described in the section entitled “Stockholder ~~Recommendations and~~ Nominations for Director” of our ~~2021~~2022 Proxy Statement on Schedule 14A, which is incorporated by reference to our ~~2020~~2021 Annual Report on Form 10-K.

Page 3329

Item 6. EXHIBITS

Incorporated by Reference

Filed

Exhibit No.

Exhibit Description

Form

Filing Date

Herewith

3.1

Amended and Restated Certificate of Incorporation of the Registrant

8-A12B/A

May 24, 2005

3.2

Amended and Restated Bylaws of the Registrant

8-K

May 18, 2015

31.1

Certification of Lynn M .M. Bamford, President and CEO, Pursuant to Rules 13a – 14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

31.2

Certification of K. Christopher Farkas,, Chief Financial Officer, Pursuant to Rules 13a – 14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended

Certification of Lynn M . M. Bamford, President and CEO, and K. Christopher Farkas, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Page 3430

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

CURTISS-WRIGHT CORPORATION

(Registrant)

By: /s/ K. Christopher Farkas

K. Christopher Farkas

Vice President and Chief Financial Officer

Dated: ~~August 4, 2021~~May 5, 2022

Page 3531


	For the six months ended June 30, 2021
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
December 31, 2020	$	49,187	$	122,535	$	2,670,328	$	(310,856)	$	(743,620)
Net earnings	—		—		120,877		—		—
Other comprehensive income, net of tax	—		—		—		13,325		—
Dividends declared	—		—		(14,321)		—		—
Restricted stock	—		(9,007)		—		—		9,007
Employee stock purchase plan and stock options exercised	—		411		—		—		4,508
Share-based compensation	—		6,604		—		—		121
Repurchase of common stock (1)	—		—		—		—		(24,395)
Other	—		(597)		—		—		597
June 30, 2021	$	49,187	$	119,946	$	2,776,884	$	(297,531)	$	(753,782)


	For the six months ended June 30, 2020
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
December 31, 2019	$	49,187	$	116,070	$	2,497,111	$	(325,274)	$	(562,722)
Net earnings	—		—		82,779		—		—
Other comprehensive loss, net of tax	—		—		—		(17,407)		—
Dividends declared	—		—		(14,163)		—		—
Restricted stock	—		(4,115)		—		—		4,115
Employee stock purchase plan and stock options exercised	—		106		—		—		5,081
Share-based compensation	—		6,923		—		—		217
Repurchase of common stock (1)	—		—		—		—		(124,613)
Other	—		(517)		—		—		517
June 30, 2020	$	49,187	$	118,467	$	2,565,727	$	(342,681)	$	(677,405)