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 ~~March 31,~~June 30, 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: ~~38,445,431~~38,394,586 shares as of ~~April 30,~~July 31, 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	910

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		1720

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		2731

Item 4.	Controls and Procedures		2731


PART II – OTHER INFORMATION


Item 1.	Legal Proceedings		2832

Item 1A.	Risk Factors		2832

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		2832

Item 3.	Defaults upon Senior Securities		2832

Item 4.	Mine Safety Disclosures		2832

Item 5.	Other Information		2832

Item 6.	Exhibits		3034

Signatures			3135

Page 3

PART 1- FINANCIAL INFORMATION

Item 1. Financial Statements

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(UNAUDITED)


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
(In thousands, except per share data)	(In thousands, except per share data)	2022		2021		(In thousands, except per share data)	2022		2021		2022		2021
Net sales	Net sales					Net sales
Product sales	Product sales	$	453,421	$	508,975	Product sales	$	505,416	$	515,392	$	958,837	$	1,024,367
Service sales	Service sales	106,040		88,084		Service sales	103,941		106,103		209,981		194,187
Total net sales	Total net sales	559,461		597,059		Total net sales	609,357		621,495		1,168,818		1,218,554
Cost of sales	Cost of sales					Cost of sales
Cost of product sales	Cost of product sales	294,527		329,454		Cost of product sales	316,389		331,881		610,916		661,335
Cost of service sales	Cost of service sales	63,532		57,848		Cost of service sales	64,454		64,895		127,986		122,743
Total cost of sales	Total cost of sales	358,059		387,302		Total cost of sales	380,843		396,776		738,902		784,078
Gross profit	Gross profit	201,402		209,757		Gross profit	228,514		224,719		429,916		434,476
Research and development expenses	Research and development expenses	20,549		21,863		Research and development expenses	23,868		23,194		44,417		45,057
Selling expenses	Selling expenses	28,092		29,596		Selling expenses	30,407		29,564		58,499		59,160
General and administrative expenses	General and administrative expenses	87,600		73,232		General and administrative expenses	76,134		77,378		163,734		150,610
Loss on divestiture	Loss on divestiture	4,651		—		Loss on divestiture	—		—		4,651		—
Operating income	Operating income	60,510		85,066		Operating income	98,105		94,583		158,615		179,649
Interest expense	Interest expense	9,530		9,959		Interest expense	9,788		10,180		19,318		20,139
Other income, net	Other income, net	2,997		4,843		Other income, net	4,555		440		7,552		5,283
Earnings before income taxes	Earnings before income taxes	53,977		79,950		Earnings before income taxes	92,872		84,843		146,849		164,793
Provision for income taxes	Provision for income taxes	(13,292)		(20,481)		Provision for income taxes	(22,000)		(23,435)		(35,292)		(43,916)
Net earnings	Net earnings	$	40,685	$	59,469	Net earnings	$	70,872	$	61,408	$	111,557	$	120,877

Net earnings per share:	Net earnings per share:					Net earnings per share:
Basic earnings per share	Basic earnings per share	$	1.06	$	1.45	Basic earnings per share	$	1.84	$	1.50	$	2.90	$	2.95
Diluted earnings per share	Diluted earnings per share	$	1.05	$	1.45	Diluted earnings per share	$	1.83	$	1.49	$	2.89	$	2.94

Dividends per share	Dividends per share	0.18		0.17		Dividends per share	0.19		0.18		0.37		0.35

Weighted-average shares outstanding:	Weighted-average shares outstanding:					Weighted-average shares outstanding:
Basic	Basic	38,456		40,933		Basic	38,429		40,915		38,438		40,921
Diluted	Diluted	38,668		41,103		Diluted	38,654		41,088		38,657		41,092

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					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022		2021			2022		2021		2022		2021
Net earnings	Net earnings	$	40,685	$	59,469	Net earnings	$	70,872	$	61,408	$	111,557	$	120,877
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)	$	(6,825)	$	(3,960)	Foreign currency translation adjustments, net of tax (1)	$	(40,336)	$	7,243	$	(47,161)	$	3,283
Pension and postretirement adjustments, net of tax (2)	Pension and postretirement adjustments, net of tax (2)	5,766		5,600		Pension and postretirement adjustments, net of tax (2)	3,988		4,442		9,754		10,042
Other comprehensive income (loss), net of tax	Other comprehensive income (loss), net of tax	(1,059)		1,640		Other comprehensive income (loss), net of tax	(36,348)		11,685		(37,407)		13,325
Comprehensive income	Comprehensive income	$	39,626	$	61,109	Comprehensive income	$	34,524	$	73,093	$	74,150	$	134,202

(1) The tax expense included in foreign currency translation adjustments for the three and six months ended June 30, 2022 was $0.9 million and $1.1 million, respectively. The tax benefit included in foreign currency translation adjustments for the three and six months ended ~~March 31, 2022 and~~June 30, 2021 was immaterial.

(2) The tax expense included in pension and postretirement adjustments for the three and six months ended ~~March 31,~~June 30, 2022 was $0.5 million and $1.9 million, respectively. The tax expense included in pension and postretirement adjustments for the three and six months ended June 30, 2021 was ~~$1.4~~$1.5 million and ~~$1.7~~$3.1 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)


		March 31, 2022		December 31, 2021			June 30, 2022		December 31, 2021
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	136,682	$	171,004	Cash and cash equivalents	$	171,414	$	171,004
Receivables, net	Receivables, net	661,129		647,148		Receivables, net	699,632		647,148
Inventories, net	Inventories, net	448,122		411,567		Inventories, net	482,790		411,567
Assets held for sale	Assets held for sale	—		10,988		Assets held for sale	—		10,988
Other current assets	Other current assets	63,942		67,101		Other current assets	84,584		67,101
Total current assets	Total current assets	1,309,875		1,307,808		Total current assets	1,438,420		1,307,808
Property, plant, and equipment, net	Property, plant, and equipment, net	355,363		360,031		Property, plant, and equipment, net	348,062		360,031
Goodwill	Goodwill	1,458,899		1,463,026		Goodwill	1,531,999		1,463,026
Other intangible assets, net	Other intangible assets, net	523,913		538,077		Other intangible assets, net	638,873		538,077
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	147,224		143,613		Operating lease right-of-use assets, net	145,325		143,613
Prepaid pension asset	Prepaid pension asset	260,238		256,422		Prepaid pension asset	263,719		256,422
Other assets	Other assets	33,855		34,568		Other assets	36,130		34,568
Total assets	Total assets	$	4,089,367	$	4,103,545	Total assets	$	4,402,528	$	4,103,545
Liabilities	Liabilities					Liabilities
Current liabilities:	Current liabilities:					Current liabilities:
Current portion of long-term debt	Current portion of long-term debt	$	202,500	$	—	Current portion of long-term debt	202,500		—
Accounts payable	Accounts payable	168,772		211,640		Accounts payable	171,589		211,640
Accrued expenses	Accrued expenses	109,077		144,466		Accrued expenses	133,706		147,701
Income taxes payable		1,478		3,235
Deferred revenue	Deferred revenue	224,679		260,157		Deferred revenue	215,188		260,157
Liabilities held for sale	Liabilities held for sale	—		12,655		Liabilities held for sale	—		12,655
Due to seller						Due to seller	247,215		—
Other current liabilities	Other current liabilities	93,745		102,714		Other current liabilities	89,009		102,714
Total current liabilities	Total current liabilities	800,251		734,867		Total current liabilities	1,059,207		734,867
Long-term debt	Long-term debt	967,744		1,050,610		Long-term debt	1,006,577		1,050,610
Deferred tax liabilities, net	Deferred tax liabilities, net	150,085		147,349		Deferred tax liabilities, net	149,213		147,349
Accrued pension and other postretirement benefit costs	Accrued pension and other postretirement benefit costs	84,610		91,329		Accrued pension and other postretirement benefit costs	84,404		91,329
Long-term operating lease liability	Long-term operating lease liability	128,897		127,152		Long-term operating lease liability	126,006		127,152
Long-term portion of environmental reserves	Long-term portion of environmental reserves	13,924		13,656		Long-term portion of environmental reserves	13,100		13,656
Other liabilities	Other liabilities	94,436		112,092		Other liabilities	96,382		112,092
Total liabilities	Total liabilities	2,239,947		2,277,055		Total liabilities	2,534,889		2,277,055
Contingencies and commitments (Note 13)
Contingencies and commitments (Note 14)						Contingencies and commitments (Note 14)
Stockholders’ equity	Stockholders’ equity					Stockholders’ equity
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
Common stock, $1 par value, 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 49,187,378 shares issued as of June 30, 2022 and December 31, 2021; outstanding shares were 38,381,875 as of June 30, 2022 and 38,469,778 as of December 31, 2021						Common stock, $1 par value, 100,000,000 shares authorized as of June 30, 2022 and December 31, 2021; 49,187,378 shares issued as of June 30, 2022 and December 31, 2021; outstanding shares were 38,381,875 as of June 30, 2022 and 38,469,778 as of December 31, 2021	49,187		49,187
Additional paid in capital	Additional paid in capital	122,603		127,104		Additional paid in capital	126,316		127,104
Retained earnings	Retained earnings	2,942,580		2,908,827		Retained earnings	3,006,164		2,908,827
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(191,524)		(190,465)		Accumulated other comprehensive loss	(227,872)		(190,465)
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)
Common treasury stock, at cost (10,805,503 shares as of June 30, 2022 and 10,717,600 shares as of December 31, 2021)						Common treasury stock, at cost (10,805,503 shares as of June 30, 2022 and 10,717,600 shares as of December 31, 2021)	(1,086,156)		(1,068,163)
Total stockholders’ equity	Total stockholders’ equity	1,849,420		1,826,490		Total stockholders’ equity	1,867,639		1,826,490
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	4,089,367	$	4,103,545	Total liabilities and stockholders’ equity	$	4,402,528	$	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)


		Three Months Ended					Six Months Ended
		March 31,					June 30,
(In thousands)	(In thousands)	2022		2021		(In thousands)	2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net earnings	Net earnings	$	40,685	$	59,469	Net earnings	$	111,557	$	120,877
Adjustments to reconcile net earnings to net cash used for operating activities:
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities						Adjustments to reconcile net earnings to net cash provided by (used for) operating activities
Depreciation and amortization	Depreciation and amortization	27,363		28,595		Depreciation and amortization	53,645		57,616
Loss on divestiture	Loss on divestiture	4,651		—		Loss on divestiture	4,651		—
Gain on sale/disposal of long-lived assets	Gain on sale/disposal of long-lived assets	(3,070)		(349)		Gain on sale/disposal of long-lived assets	(3,004)		(590)
Deferred income taxes	Deferred income taxes	803		3,629		Deferred income taxes	(4,516)		6,293
Share-based compensation	Share-based compensation	3,809		3,327		Share-based compensation	7,580		6,725
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	(13,414)		(27,593)		Receivables, net	(47,826)		(53,787)
Inventories, net	Inventories, net	(38,149)		(18,059)		Inventories, net	(58,620)		(15,214)
Progress payments	Progress payments	(395)		(1,114)		Progress payments	(954)		(2,680)
Accounts payable and accrued expenses	Accounts payable and accrued expenses	(79,492)		(71,528)		Accounts payable and accrued expenses	(55,406)		(58,217)
Deferred revenue	Deferred revenue	(35,154)		(14,836)		Deferred revenue	(45,397)		6,663
Income taxes payable		6,927		16,247
Pension and postretirement liabilities, net	Pension and postretirement liabilities, net	(6,034)		1,182		Pension and postretirement liabilities, net	(4,376)		(4,017)
Other current and long-term assets and liabilities	Other current and long-term assets and liabilities	(32,845)		(5,573)		Other current and long-term assets and liabilities	(50,605)		(15,193)
Net cash used for operating activities		(124,315)		(26,603)
Net cash provided by (used for) operating activities						Net cash provided by (used for) operating activities	(93,271)		48,476
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	5,567		1,022		Proceeds from sale/disposal of long-lived assets	6,319		2,982
Additions to property, plant, and equipment	Additions to property, plant, and equipment	(10,896)		(8,537)		Additions to property, plant, and equipment	(19,492)		(17,771)
Additional consideration paid on prior year acquisitions	Additional consideration paid on prior year acquisitions	(5,062)		(5,340)		Additional consideration paid on prior year acquisitions	(5,062)		(5,340)
Net cash used for investing activities	Net cash used for investing activities	(10,391)		(12,855)		Net cash used for investing activities	(18,235)		(20,129)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Borrowings under revolving credit facility		241,198		65,301
Payment of revolving credit facility		(121,198)		(65,301)
Borrowings under revolving credit facilities						Borrowings under revolving credit facilities	653,547		163,507
Payments of revolving credit facilities						Payments of revolving credit facilities	(494,347)		(163,507)
Repurchases of common stock	Repurchases of common stock	(18,857)		(11,797)		Repurchases of common stock	(31,645)		(24,395)
Proceeds from share-based compensation	Proceeds from share-based compensation	5,284		4,919		Proceeds from share-based compensation	5,284		4,919
Dividends paid						Dividends paid	(14,220)		(6,961)
Other	Other	(248)		(229)		Other	(499)		(462)
Net cash provided by (used for) financing activities		106,179		(7,107)
Net cash (used for)/provided by financing activities						Net cash (used for)/provided by financing activities	118,120		(26,899)
Effect of exchange-rate changes on cash	Effect of exchange-rate changes on cash	(5,795)		(4,614)		Effect of exchange-rate changes on cash	(6,204)		(2,188)
Net decrease in cash and cash equivalents		(34,322)		(51,179)
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	410		(740)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	171,004		198,248		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	$	136,682	$	147,069	Cash and cash equivalents at end of period	$	171,414	$	197,508
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, 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	—		—		111,557		—		—
Other comprehensive loss, net of tax	—		—		—		(37,407)		—
Dividends declared	—		—		(14,220)		—		—
Restricted stock	—		(8,523)		—		—		8,523
Employee stock purchase plan	—		814		—		—		4,470
Share-based compensation	—		7,427		—		—		153
Repurchase of common stock (1)	—		—		—		—		(31,645)
Other	—		(506)		—		—		506
June 30, 2022	$	49,187	$	126,316	$	3,006,164	$	(227,872)	$	(1,086,156)


	For the three months ended June 30, 2022
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock
March 31, 2022	$	49,187	$	122,603	$	2,942,580	$	(191,524)	$	(1,073,426)
Net earnings	—		—		70,872		—		—
Other comprehensive loss, net of tax	—		—		—		(36,348)		—
Dividends declared	—		—		(7,288)		—		—
Share-based compensation	—		3,713		—		—		58
Repurchase of common stock (1)	—		—		—		—		(12,788)
June 30, 2022	$	49,187	$	126,316	$	3,006,164	$	(227,872)	$	(1,086,156)

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)

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)
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	—		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)

See notes to condensed consolidated financial statements

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

~~See notes to condensed consolidated financial statements~~

stock, respectively.

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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 integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. 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 ~~March 31,~~June 30, 2022 and 2021, 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 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.

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 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 ~~March 31,~~June 30, 2022 and 2021:

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022		2021			2022		2021		2022		2021
Over-time	Over-time	53	%	52	%	Over-time	53	%	52	%	53	%	52	%
Point-in-time	Point-in-time	47	%	48	%	Point-in-time	47	%	48	%	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 ~~$2.3~~$2.4 billion as of ~~March 31,~~June 30, 2022, of which the Corporation expects to recognize approximately ~~89%~~88% 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				Total Net Sales by End Market and Customer Type	Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
(In thousands)	(In thousands)	2022		2021		(In thousands)	2022		2021		2022		2021
Aerospace & Defense	Aerospace & Defense					Aerospace & Defense
Aerospace Defense	Aerospace Defense	$	98,004	$	111,016	Aerospace Defense	$	94,545	$	99,977	$	192,549	$	210,993
Ground Defense	Ground Defense	39,108		55,746		Ground Defense	44,393		48,221		83,501		103,967
Naval Defense	Naval Defense	162,967		177,905		Naval Defense	172,786		177,724		335,753		355,629
Commercial Aerospace	Commercial Aerospace	60,892		57,269		Commercial Aerospace	68,192		71,555		129,084		128,824
Total Aerospace & Defense customers		$	360,971	$	401,936
Total Aerospace & Defense						Total Aerospace & Defense	$	379,916	$	397,477	$	740,887	$	799,413

Commercial	Commercial					Commercial
Power & Process	Power & Process	$	104,788	$	105,504	Power & Process	$	125,355	$	125,333	$	230,143	$	230,837
General Industrial	General Industrial	93,702		89,619		General Industrial	104,086		98,685		197,788		188,304
Total Commercial customers		$	198,490	$	195,123
Total Commercial						Total Commercial	$	229,441	$	224,018	$	427,931	$	419,141

Total	Total	$	559,461	$	597,059	Total	$	609,357	$	621,495	$	1,168,818	$	1,218,554

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 ~~March 31,~~June 30, 2022 included in the contract liabilities balance as of January 1, 2022 was approximately $56 million and $135 million, respectively. Revenue recognized during the three and six months ended June 30, 2021 included in the contract liabilities ~~at the beginning~~balance as of ~~the respective years~~January 1, 2021 was approximately ~~$79~~$65 million and ~~$77~~$142 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

3.ACQUISITIONS

The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets. The Corporation has completed numerous acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements. This goodwill arises because the acquisition purchase price reflects the future

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition. Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

The Corporation allocates the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. In the months after closing, as the Corporation obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and as the Corporation learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. Only items identified as of the acquisition date are considered for subsequent adjustment. The Corporation will make appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

During the six months ended June 30, 2022, the Corporation acquired 1 business for an aggregate purchase price of $247 million, which is described in more detail below, and represents a non-cash investing activity in the Condensed Consolidated Statement of Cash Flows. During the six months ended June 30, 2021, the Corporation did not complete any acquisitions.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for the acquisition consummated during the six months ended June 30, 2022.


(In thousands)	2022
Accounts receivable	$	9,970
Inventory	22,790
Property, plant, and equipment	1,683
Other current and non-current assets	1,872
Intangible assets	130,500
Operating lease right-of-use assets, net	1,197
Current and non-current liabilities	(9,607)
Net tangible and intangible assets	158,405
Goodwill	88,810
Total purchase price	$	247,215

Due to seller	$	247,215
Cash paid to date	$	—

Goodwill deductible for tax purposes	$	88,810

2022 Acquisition

Safran Aerosystems Arresting Company (SAA)

On June 30, 2022, the Corporation completed the acquisition of SAA for $247 million. The Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type. SAA is a designer and manufacturer of mission-critical, fixed-wing aircraft emergency arresting systems. The acquired business will operate within the Naval & Power segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

4. ASSETS HELD FOR SALE

In January 2022, the Corporation completed the sale of its industrial valve business in Germany, which was presented as held for sale in the Corporation's 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 first quarter of 2022.

~~4. RECEIVABLES~~

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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:


(In thousands)	(In thousands)	March 31, 2022		December 31, 2021		(In thousands)	June 30, 2022		December 31, 2021
Billed receivables:	Billed receivables:					Billed receivables:
Trade and other receivables	Trade and other receivables	$	352,905	$	362,007	Trade and other receivables	$	414,195	$	362,007
Unbilled receivables:
Unbilled receivables (contract assets):						Unbilled receivables (contract assets):
Recoverable costs and estimated earnings not billed	Recoverable costs and estimated earnings not billed	314,240		291,758		Recoverable costs and estimated earnings not billed	291,485		291,758
Less: Progress payments applied	Less: Progress payments applied	(1,202)		(1,297)		Less: Progress payments applied	(688)		(1,297)
Net unbilled receivables	Net unbilled receivables	313,038		290,461		Net unbilled receivables	290,797		290,461
Less: Allowance for doubtful accounts	Less: Allowance for doubtful accounts	(4,814)		(5,320)		Less: Allowance for doubtful accounts	(5,360)		(5,320)
Receivables, net	Receivables, net	$	661,129	$	647,148	Receivables, net	$	699,632	$	647,148

5.6. 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) March 31, 2022 December 31, 2021
Raw materials $ 217,900 $ 191,066
Work-in-process 81,618 78,221
Finished goods 106,167 98,944
Inventoried costs related to U.S. Government and other long-term contracts (1)
47,387 48,619
Inventories, net of reserves 453,072 416,850
Less: Progress payments applied (4,950) (5,283)
Inventories, net $ 448,122 $ 411,567


(In thousands)	June 30, 2022		December 31, 2021
Raw materials	$	239,575	$	191,066
Work-in-process	87,193		78,221
Finished goods	118,655		98,944
Inventoried costs related to U.S. Government and other long-term contracts (1)	42,110		48,619
Inventories, net of reserves	487,533		416,850
Less: Progress payments applied	(4,743)		(5,283)
Inventories, net	$	482,790	$	411,567

(1)This caption includes capitalized development costs of ~~$24.9~~$19.8 million as of ~~March 31,~~June 30, 2022 related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of ~~March 31,~~June 30, 2022, capitalized development costs of ~~$17.1~~$12.3 million are not currently supported by existing firm orders.

6.7. GOODWILL

The changes in the carrying amount of goodwill for the ~~three~~six months ended ~~March 31,~~June 30, 2022 are as follows:


(In thousands)	(In thousands)	Aerospace & Industrial		Defense Electronics		Naval & Power		Consolidated		(In thousands)	Aerospace & Industrial		Defense Electronics		Naval & Power		Consolidated
December 31, 2021	December 31, 2021	$	316,147	$	714,014	$	432,865	$	1,463,026	December 31, 2021	$	316,147	$	714,014	$	432,865	$	1,463,026
Acquisitions										Acquisitions	—		—		88,810		88,810
Adjustments	Adjustments	—		(469)		—		(469)		Adjustments	—		967		—		967
Foreign currency translation adjustment	Foreign currency translation adjustment	(1,629)		(1,861)		(168)		(3,658)		Foreign currency translation adjustment	(6,335)		(10,445)		(4,024)		(20,804)
March 31, 2022		$	314,518	$	711,684	$	432,697	$	1,458,899
June 30, 2022										June 30, 2022	$	309,812	$	704,536	$	517,651	$	1,531,999

78. 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:

March 31, 2022 December 31, 2021
(In thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net
Technology $ 274,264 $ (167,627) $ 106,637 $ 274,615 $ (164,077) $ 110,538
Customer related intangibles 568,019 (277,504) 290,515 568,720 (270,816) 297,904
Programs (1)
144,000 (28,800) 115,200 144,000 (27,000) 117,000
Other intangible assets 49,512 (37,951) 11,561 49,559 (36,924) 12,635
Total $ 1,035,795 $ (511,882) $ 523,913 $ 1,036,894 $ (498,817) $ 538,077


	June 30, 2022						December 31, 2021
(In thousands)	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Technology	$	302,999	$	(168,995)	$	134,004	$	274,615	$	(164,077)	$	110,538
Customer related intangibles	657,605		(280,993)		376,612		568,720		(270,816)		297,904
Programs (1)	144,000		(30,600)		113,400		144,000		(27,000)		117,000
Other intangible assets	53,484		(38,627)		14,857		49,559		(36,924)		12,635
Total	$	1,158,088	$	(519,215)	$	638,873	$	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.

During the six months ended June 30, 2022, the Corporation acquired intangible assets of $130.5 million, which included Customer-related intangibles of $94.6 million, Technology of $31.5 million, and Other intangible assets of $4.4 million. The weighted average amortization periods for these aforementioned intangible assets are 15.9 years, 15.0 years, and 10.0 years, respectively.

Total intangible amortization expense for the ~~three~~six months ended ~~March 31,~~June 30, 2022 was ~~$14~~$28 million, as compared to ~~$15~~$30 million in the comparable prior year period. The estimated future amortization expense of intangible assets over the next five years is as follows:


(In millions)	(In millions)			(In millions)
2022	2022	$	55	2022	$	63
2023	2023	$	52	2023	$	66
2024	2024	$	48	2024	$	55
2025	2025	$	45	2025	$	52
2026	2026	$	44	2026	$	51

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

Effects on Condensed Consolidated Statements of Earnings

Undesignated hedges

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The ~~(losses)~~gains 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)~~losses for the three and six months ended June 30, 2022 were $5 million and $6 million, respectively. The gains for the three and six months ended ~~March 31, 2022 and~~June 30, 2021 were immaterial.

Debt

~~Page 12~~

~~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 ~~March 31,~~June 30, 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.


		March 31, 2022				December 31, 2021					June 30, 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
Revolving credit agreement, due 2023		$	213,900	$	213,900	$	93,900	$	93,900
Revolving credit agreement, due 2027										Revolving credit agreement, due 2027	$	253,100	$	253,100	$	93,900	$	93,900
3.70% Senior notes due 2023	3.70% Senior notes due 2023	202,500		204,456		202,500		208,086		3.70% Senior notes due 2023	202,500		202,266		202,500		208,086
3.85% Senior notes due 2025	3.85% Senior notes due 2025	90,000		90,363		90,000		95,246		3.85% Senior notes due 2025	90,000		88,790		90,000		95,246
4.24% Senior notes due 2026	4.24% Senior notes due 2026	200,000		204,427		200,000		218,421		4.24% Senior notes due 2026	200,000		198,087		200,000		218,421
4.05% Senior notes due 2028	4.05% Senior notes due 2028	67,500		68,571		67,500		73,783		4.05% Senior notes due 2028	67,500		65,836		67,500		73,783
4.11% Senior notes due 2028	4.11% Senior notes due 2028	90,000		91,645		90,000		98,854		4.11% Senior notes due 2028	90,000		87,593		90,000		98,854
3.10% Senior notes due 2030	3.10% Senior notes due 2030	150,000		142,137		150,000		154,832		3.10% Senior notes due 2030	150,000		133,963		150,000		154,832
3.20% Senior notes due 2032	3.20% Senior notes due 2032	150,000		141,071		150,000		154,875		3.20% Senior notes due 2032	150,000		131,206		150,000		154,875
Total debt	Total debt	1,163,900		1,156,570		1,043,900		1,097,997		Total debt	1,203,100		1,160,841		1,043,900		1,097,997
Debt issuance costs, net	Debt issuance costs, net	(908)		(908)		(949)		(949)		Debt issuance costs, net	(868)		(868)		(949)		(949)
Unamortized interest rate swap proceeds	Unamortized interest rate swap proceeds	7,252		7,252		7,659		7,659		Unamortized interest rate swap proceeds	6,845		6,845		7,659		7,659
Total debt, net	Total debt, net	$	1,170,244	$	1,162,914	1,050,610		1,104,707		Total debt, net	$	1,209,077	$	1,166,818	$	1,050,610	$	1,104,707

Revolving Credit Agreement

In May 2022, the Corporation terminated its existing credit agreement, which was set to expire in October 2023, and entered into a new credit agreement (“Credit Agreement”) with a syndicate of financial institutions. The Credit Agreement, which is set to expire in May 2027, increases the size of the Corporation’s revolving credit facility to $750 million, and expands the accordion feature to $250 million. The proceeds available under the Credit Agreement are to be used for general corporate purposes, which may include the funding of possible future acquisitions or supporting internal growth initiatives.

9.10. PENSION PLANS

Defined Benefit Pension Plans

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

The components of net periodic pension cost for the three and six months ended June 30, 2022 and 2021 were as follows:

Three Months Ended
March 31,
(In thousands) 2022 2021
Service cost $ 6,063 $ 6,870
Interest cost 5,288 4,306
Expected return on plan assets (13,857) (15,180)
Amortization of prior service cost (86) (63)
Amortization of unrecognized actuarial loss 4,006 7,143
Cost of settlements 1,842 —
Net periodic pension cost $ 3,256 $ 3,076

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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,
(In thousands)	2022		2021		2022		2021
Service cost	$	5,970	$	7,120	$	12,033	$	13,990
Interest cost	5,418		4,511		10,706		8,817
Expected return on plan assets	(13,858)		(15,191)		(27,715)		(30,371)
Amortization of prior service cost	(87)		(369)		(173)		(432)
Amortization of unrecognized actuarial loss	3,845		7,574		7,851		14,717
Cost of settlements	—		3,075		1,842		3,075
Net periodic pension cost	$	1,288	$	6,720	$	4,544	$	9,796

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during 2021, and does not expect to do so in 2022. Contributions to the foreign benefit plans are not expected to be material in 2022.

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, as well as during the three and six months ended June 30, 2021, the Company recognized a settlement ~~charge~~charges related to the retirement of a former ~~executive.~~executives. The settlement ~~charge represents an event~~charges represent events that isare 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

~~Page 13~~

~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

contribution components up to a maximum employer contribution of of 7% of eligible compensation. During the three and six months ended ~~March 31,~~June 30, 2022, the expense relating to the plan was $4.6 million and $10.3 million, respectively. During the three and six months ended June 30, 2021, the expense relating to the plan was ~~$5.7~~$4.3 million and ~~$5.3~~$9.6 million, respectively.

~~10.~~11. 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
March 31,
(In thousands) 2022 2021
Basic weighted-average shares outstanding 38,456 40,933
Dilutive effect of deferred stock compensation 212 170
Diluted weighted-average shares outstanding 38,668 41,103


	Three Months Ended		Six Months Ended
	June 30,		June 30,
(In thousands)	2022	2021	2022	2021
Basic weighted-average shares outstanding	38,429	40,915	38,438	40,921
Dilutive effect of deferred stock compensation	225	173	219	171
Diluted weighted-average shares outstanding	38,654	41,088	38,657	41,092

For the three and six months ended ~~March 31,~~June 30, 2022, approximately 37,000 and ~~2021, approximately 26,000 and 88,000~~31,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period. There were approximately 34,000 and 61,000 anti-dilutive equity-based awards for the three and six months ended June 30, 2021, respectively.

~~11.~~12. SEGMENT INFORMATION

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.

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
(In thousands)	(In thousands)	2022		2021		(In thousands)	2022		2021		2022		2021
Net sales	Net sales					Net sales
Aerospace & Industrial	Aerospace & Industrial	$	191,850	$	181,138	Aerospace & Industrial	$	209,311	$	200,254	$	401,161	$	381,392
Defense Electronics	Defense Electronics	143,938		182,298		Defense Electronics	150,404		163,468		294,342		345,766
Naval & Power	Naval & Power	225,315		235,580		Naval & Power	251,313		259,496		476,628		495,076
Less: Intersegment revenues	Less: Intersegment revenues	(1,642)		(1,957)		Less: Intersegment revenues	(1,671)		(1,723)		(3,313)		(3,680)
Total consolidated	Total consolidated	$	559,461	$	597,059	Total consolidated	$	609,357	$	621,495	$	1,168,818	$	1,218,554

Operating income (expense)	Operating income (expense)					Operating income (expense)
Aerospace & Industrial	Aerospace & Industrial	$	24,853	$	19,025	Aerospace & Industrial	$	32,464	$	31,977	$	57,317	$	51,002
Defense Electronics	Defense Electronics	23,290		36,623		Defense Electronics	24,460		29,271		47,750		65,894
Naval & Power	Naval & Power	27,288		38,057		Naval & Power	50,001		43,095		77,289		81,152
Corporate and other (1)	Corporate and other (1)	(14,921)		(8,639)		Corporate and other (1)	(8,820)		(9,760)		(23,741)		(18,399)
Total consolidated	Total consolidated	$	60,510	$	85,066	Total consolidated	$	98,105	$	94,583	$	158,615	$	179,649

(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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~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2022		2021		2022		2021
Total operating income	$	98,105	$	94,583	$	158,615	$	179,649
Interest expense	9,788		10,180		19,318		20,139
Other income, net	4,555		440		7,552		5,283
Earnings before income taxes	$	92,872	$	84,843	$	146,849	$	164,793

Three Months Ended
March 31,
(In thousands) 2022 2021
Total operating income $ 60,510 $ 85,066
Interest expense 9,530 9,959
Other income, net 2,997 4,843
Earnings before income taxes $ 53,977 $ 79,950


(In thousands)	(In thousands)	March 31, 2022		December 31, 2021		(In thousands)	June 30, 2022		December 31, 2021
Identifiable assets	Identifiable assets					Identifiable assets
Aerospace & Industrial	Aerospace & Industrial	$	1,011,295	$	991,508	Aerospace & Industrial	$	1,006,902	$	991,508
Defense Electronics	Defense Electronics	1,518,990		1,536,369		Defense Electronics	1,541,806		1,536,369
Naval & Power	Naval & Power	1,266,159		1,270,099		Naval & Power	1,551,343		1,270,099
Corporate and Other	Corporate and Other	292,923		294,581		Corporate and Other	302,477		294,581
Assets held for sale	Assets held for sale	—		10,988		Assets held for sale	—		10,988
Total consolidated	Total consolidated	$	4,089,367	$	4,103,545	Total consolidated	$	4,402,528	$	4,103,545

~~12.~~13. 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) Foreign currency translation adjustments, net Total pension and postretirement adjustments, net Accumulated other comprehensive income (loss)
December 31, 2020 $ (88,737) $ (222,119) $ (310,856)
Other comprehensive income (loss) before reclassifications (1)
(10,829) 107,211 96,382
Amounts reclassified from accumulated other comprehensive loss (1)
— 24,009 24,009
Net current period other comprehensive income (loss) (10,829) 131,220 120,391
December 31, 2021 $ (99,566) $ (90,899) $ (190,465)
Other comprehensive income (loss) before reclassifications (1)
(6,825) 1,393 (5,432)
Amounts reclassified from accumulated other comprehensive income (loss) (1)
— 4,373 4,373
Net current period other comprehensive income (loss) (6,825) 5,766 (1,059)
March 31, 2022 $ (106,391) $ (85,133) $ (191,524)

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NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)


(In thousands)	Foreign currency translation adjustments, net		Total pension and postretirement adjustments, net		Accumulated other comprehensive income (loss)
December 31, 2020	$	(88,737)	$	(222,119)	$	(310,856)
Other comprehensive income (loss) before reclassifications (1)	(10,829)		107,211		96,382
Amounts reclassified from accumulated other comprehensive income (1)	—		24,009		24,009
Net current period other comprehensive income (loss)	(10,829)		131,220		120,391
December 31, 2021	$	(99,566)	$	(90,899)	$	(190,465)
Other comprehensive income (loss) before reclassifications (1)	(47,161)		2,091		(45,070)
Amounts reclassified from accumulated other comprehensive income (1)	—		7,663		7,663
Net current period other comprehensive income (loss)	(47,161)		9,754		(37,407)
June 30, 2022	$	(146,727)	$	(81,145)	$	(227,872)

(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	$	86173	Other income, net
Amortization of actuarial losses	~~(4,006)~~(7,851)		Other income, net
Settlements	(1,842)		Other income, net
	~~(5,762)~~(9,520)		Earnings before income taxes
	~~1,389~~1,857		Provision for income taxes
Total reclassifications	$	~~(4,373)~~(7,663)	Net earnings

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~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(UNAUDITED)~~

~~13.~~14. CONTINGENCIES AND COMMITMENTS

From time to time, the Corporation and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues, commercial or contractual disputes, and acquisitions or divestitures. The Corporation continues to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not ~~believe~~expect that ~~the disposition of any of these matters, individually or in the aggregate,~~such legal proceedings will have a material adverse ~~effect~~impact on its condensed consolidated financial ~~condition, results of operations, and cash flows.~~statements.

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

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

secure advance payments from certain international customers. As of ~~March 31,~~June 30, 2022 and December 31, 2021, there were ~~$19.5~~$17.2 million and $21.1 million of stand-by letters of credit outstanding, ~~respectively. As of March 31, 2022~~respectively, and ~~December 31, 2021, there were $2.7~~$2.4 million and $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 $35.2 million surety bond.

AP1000 Program

In February 2022, the Corporation and Westinghouse Electric Company (WEC) executed a settlement agreement to resolve all open claims and counterclaims under the AP1000 U.S. and China contracts. Under the terms of the settlement agreement, the Corporation paid WEC $15 million in March 2022 and is required to pay WEC a final amount of $10 million in the first quarter of 2023 in exchange for the Corporation’s full release from all open claims under such contracts, whether known or unknown, as well as negotiating and executing a right of first refusal for all future AP1000 projects. As of December 31, 2021, the Corporation was adequately accrued regarding this matter.

15. SUBSEQUENT EVENTS

On August 1, 2022, the Corporation announced that it priced a private placement debt offering of $300 million for senior notes. The offering is expected to close in the fourth quarter, subject to customary closing conditions.

******

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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, the impact of significant inflation, higher interest rates or deflation, and measures taken by governments and private industry in response, (d) statements of future economic performance and 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 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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MANAGEMENT’S DISCUSSION and ANALYSIS of

FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

COMPANY ORGANIZATION

Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets. We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments. We operate across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. Approximately ~~66%~~67% of our 2022 revenues are expected to be generated from 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. 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, the emergence and impact of any new COVID-19 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, principal payments on the current portion of long-term debt obligations, 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 ~~months~~and six month periods ended ~~March 31,~~June 30, 2022. The financial information as of ~~March 31,~~June 30, 2022 should be read in conjunction with the financial statements for the year ended December 31, 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.

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 foreign currency translation.

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Condensed Consolidated Statements of Earnings	Condensed Consolidated Statements of Earnings							Condensed Consolidated Statements of Earnings
		Three Months Ended							Three Months Ended						Six Months Ended
		March 31,							June 30,						June 30,
(In thousands)	(In thousands)	2022		2021		% change		(In thousands)	2022		2021		% change		2022		2021		% change
Sales	Sales							Sales
Aerospace & Industrial	Aerospace & Industrial	$	191,112	$	180,331	6	%	Aerospace & Industrial	$	208,572	$	199,713	4	%	$	399,684	$	380,044	5	%
Defense Electronics	Defense Electronics	143,069		181,212		(21	%)	Defense Electronics	149,549		162,351		(8	%)	292,618		343,563		(15	%)
Naval & Power	Naval & Power	225,280		235,516		(4	%)	Naval & Power	251,236		259,431		(3	%)	476,516		494,947		(4	%)
Total sales	Total sales	$	559,461	$	597,059	(6	%)	Total sales	$	609,357	$	621,495	(2	%)	$	1,168,818	$	1,218,554	(4	%)

Operating income	Operating income							Operating income
Aerospace & Industrial	Aerospace & Industrial	$	24,853	$	19,025	31	%	Aerospace & Industrial	$	32,464	$	31,977	2	%	$	57,317	$	51,002	12	%
Defense Electronics	Defense Electronics	23,290		36,623		(36	%)	Defense Electronics	24,460		29,271		(16	%)	47,750		65,894		(28	%)
Naval & Power	Naval & Power	27,288		38,057		(28	%)	Naval & Power	50,001		43,095		16	%	77,289		81,152		(5	%)
Corporate and other	Corporate and other	(14,921)		(8,639)		(73	%)	Corporate and other	(8,820)		(9,760)		10	%	(23,741)		(18,399)		(29	%)
Total operating income	Total operating income	$	60,510	$	85,066	(29	%)	Total operating income	$	98,105	$	94,583	4	%	$	158,615	$	179,649	(12	%)

Interest expense	Interest expense	9,530		9,959		4	%	Interest expense	9,788		10,180		4	%	19,318		20,139		4	%
Other income, net	Other income, net	2,997		4,843		(38)	%	Other income, net	4,555		440		NM		7,552		5,283		43	%

Earnings before income taxes	Earnings before income taxes	53,977		79,950		(32	%)	Earnings before income taxes	92,872		84,843		9	%	146,849		164,793		(11	%)
Provision for income taxes	Provision for income taxes	(13,292)		(20,481)		35	%	Provision for income taxes	(22,000)		(23,435)		6	%	(35,292)		(43,916)		20	%
Net earnings	Net earnings	$	40,685	$	59,469	(32	%)	Net earnings	$	70,872	$	61,408	15	%	$	111,557	$	120,877	(8	%)

New orders	New orders	$	634,265	$	579,447	9	%	New orders	$	776,162	$	698,970	11	%	$	1,410,428	$	1,271,857	11	%

NM - Not meaningful

Components of sales and operating income increase (decrease):


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022 vs. 2021					2022 vs. 2021				2022 vs. 2021
		Sales		Operating Income			Sales		Operating Income		Sales		Operating Income
Organic	Organic	(6	%)	(22	%)	Organic	(1	%)	2	%	(3	%)	(9	%)
Acquisitions	Acquisitions	—	%	—	%	Acquisitions	—	%	—	%	—	%	—	%
Loss on divestiture	Loss on divestiture	—	%	(6	%)	Loss on divestiture	—	%	—	%	—	%	(4	%)
Foreign currency	Foreign currency	—	%	(1	%)	Foreign currency	(1	%)	2	%	(1	%)	1	%
Total	Total	(6	%)	(29	%)	Total	(2	%)	4	%	(4	%)	(12	%)

Sales ~~during~~in the ~~three months ended March 31, 2022~~second quarter decreased ~~$38~~$12 million, or 6%2%, to ~~$559~~$609 million, compared with the prior year period. On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased ~~$38~~$13 million and ~~$11~~$8 million, respectively, with sales from the Aerospace & Industrial segment increasing ~~$11~~$9 million.

Sales during the six months ended June 30, 2022 decreased $50 million, or 4%, to $1,169 million, compared with the prior year period. On a segment basis, sales from the Defense Electronics and Naval & Power segments decreased $51 million and $18

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million, respectively, with sales from the Aerospace & Industrial segment increasing $19 million. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income ~~during~~in the ~~three months ended March 31, 2022 decreased $25~~second quarter increased $4 million, or ~~29%~~4%, to ~~$61~~$98 million, and operating margin increased 90 basis points to 16.1% compared with the ~~prior year~~same period ~~while~~in 2021. Operating income and operating margin in the Naval & Power segment benefited from favorable mix in the naval defense and process markets, as well as the benefits of our ongoing operational excellence initiatives. In the Aerospace & Industrial segment, favorable absorption on higher sales and the benefits of our ongoing operational excellence initiatives were essentially offset by higher research and development investments. Decreases in operating income and operating margin in the Defense Electronics segment were primarily due to unfavorable overhead absorption on lower sales.

Operating income during the six months ended June 30, 2022 decreased $21 million, or 12%, to $159 million and operating margin decreased ~~340~~110 basis points to ~~10.8%~~13.6%, 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 operational excellence initiatives. Operating income and operating margin in the Naval & Power segment were negatively impacted by a loss on sale of our industrial valves business in Germany in the current period, as well as unfavorable overhead absorption on lower sales in the naval defense market. These decreases were partially offset by increases in operating income and operating margin in the Aerospace & Industrial segment, primarily due to favorable absorption on higher sales, as well as the benefits of our ongoing operational excellence initiatives.

Non-segment operating expense in the second quarter decreased $1 million, or 10%, to $9 million, primarily due to lower pension costs in the current period. Non-segment operating expense during the six months ended June 30, 2022 increased $5 million, or 29%, to $24 million, primarily due to costs associated with shareholder activism in the current period.

Interest expense in the second quarter and six months ended June 30, 2022 of $10 million and $19 million, respectively, was essentially flat against the comparable prior year periods.

Other income, net in the second quarter increased $4 million to $5 million. Other income, net during the six months ended June 30, 2022 increased $2 million, or 43%, to $8 million. Increases in both periods were primarily due to lower overall pension costs against the comparable prior year periods.

The effective tax rate of 23.7% in the second quarter decreased compared to an effective tax rate of 27.6% in the prior year period. The effective tax rate of 24.0% for the six months ended June 30, 2022 decreased as compared to an effective tax rate of 26.6%. Decreases in both of the comparable periods were primarily due to an unfavorable foreign rate change on deferred tax liabilities in the prior year that did not recur, as well as lower provisional tax expense associated with the Tax Act for foreign withholding taxes in the current year period.

Comprehensive income in the second quarter was $35 million, compared to comprehensive income of $73 million in the prior year period. The change was primarily due to the following:

•Foreign currency translation adjustments in the second quarter resulted in a $40 million comprehensive loss, compared to a $7 million comprehensive gain in the prior year period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound.

•Net earnings increased $9 million, primarily due to higher operating income and other income, net.

Comprehensive income during the six months ended June 30, 2022 was $74 million, compared to comprehensive income of $134 million in the prior year period. The change was primarily due to the following:

•Foreign currency translation adjustments for the six months ended June 30, 2022 resulted in a $47 million comprehensive loss, compared to a $3 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound.

•Net earnings decreased $9 million, primarily due to lower operating income.

New orders in the second quarter increased $77 million from the comparable prior year period, primarily due to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for commercial aerospace equipment in the Defense Electronics and Aerospace & Industrial segments. These increases were partially offset by the timing of new orders for industrial vehicles in the Aerospace & Industrial segment.

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~~operational excellence initiatives. Operating income and operating margin in~~New orders during the ~~Naval & Power segment decreased~~ primarily due to a loss on sale of our industrial valves business in Germany, unfavorable overhead absorption on lower sales in the naval defense market, and unfavorable mix in the power & process market. These decreases were partially offset by ~~increases in operating income and operating margin in the Aerospace & Industrial segment, primarily due to~~ ~~favorable absorption on higher sales, as well as the~~ ~~benefits of our ongoing operational excellence initiatives.~~

~~Non-segment operating expense~~ ~~during the three~~six months ended ~~March 31,~~June 30, 2022 increased $6$139 million~~, or 73%, to~~ ~~$15 million, primarily due to costs associated with shareholder activism in the current period.~~

~~Interest expense~~ of ~~$10 million was essentially flat compared to the prior year period.~~

~~Other income, net~~ ~~during the three months ended March 31, 2022 decreased $2 million, or 38%, to~~ ~~$3 million, primarily due to pension settlement charges recognized in the current period related to the retirement of a former executive.~~

~~The effective tax rate~~ for the three months ended March 31, 2022 of 24.6% decreased as compared to an effective tax rate of 25.6% in the prior year period, primarily due to higher stock compensation benefits in the current period.

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

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

•Foreign currency translation adjustments for the three months ended March 31, 2022 resulted in a $7 million comprehensive loss, compared to a $4 million comprehensive loss in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound.

~~New orders~~ ~~increased $55 million during the three months ended March 31, 2022~~ from the comparable prior year period primarily due to the timing of naval defense orders in the Naval & Power segment, as well as an increase in new orders for ~~industrial vehicles and~~ commercial aerospace ~~products in the Aerospace & Industrial segment. These increases were partially offset by the timing of orders across all defense-related markets~~equipment in the 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.~~and Aerospace & Industrial segments.

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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~~MANAGEMENT’S DISCUSSION and ANALYSIS of~~

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


	Three Months Ended							Six Months Ended
	June 30,							June 30,
(In thousands)	2022			2021			% change	2022			2021			% change
Sales	$	208,572		$	199,713		4%	$	399,684		$	380,044		5%
Operating income	32,464			31,977			2%	57,317			51,002			12%
Operating margin	15.6		%	16.0		%	(40 bps)	14.3		%	13.4		%	90 bps
New orders	$	215,279		$	222,825		(3%)	$	443,593		$	421,940		5%

Components of sales and operating income increase (decrease):


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022 vs. 2021					2022 vs. 2021				2022 vs. 2021
		Sales		Operating Income			Sales		Operating Income		Sales		Operating Income
Organic	Organic	7	%	33	%	Organic	7	%	2	%	7	%	14	%
Acquisitions	Acquisitions	—	%	—	%	Acquisitions	—	%	—	%	—	%	—	%
Foreign currency	Foreign currency	(1	%)	(2	%)	Foreign currency	(3	%)	—	%	(2	%)	(2	%)
Total	Total	6	%	31	%	Total	4	%	2	%	5	%	12	%

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

Sales ~~during~~in the ~~three months ended March 31, 2022~~second quarter increased ~~$11~~$9 million, or 6%4%, to ~~$191~~$209 million from the prior year period, primarily due to higher sales in the commercial aerospace and general industrial markets. Sales in the commercial aerospace market benefited $5 million from higher demand for actuation and sensors products as well as surface treatment services on various narrow-body ~~platforms~~and wide-body platforms. Sales in the ~~commercial aerospace market. Sales also benefited from~~general industrial market increased $5 million primarily due to higher demand for industrial vehicle ~~products~~products. These increases were partially offset by sales decreases in the aerospace defense market primarily due to lower sales of actuation and sensors products on various fighter jet programs.

Sales during the six months ended June 30, 2022 increased $19 million, or 5%, to $400 million from the prior year period, primarily due to higher sales in the commercial aerospace and general industrial ~~market.~~markets. In the commercial aerospace market, sales increased $10 million primarily due to higher demand for actuation and sensors products as well as surface treatment services. The general industrial market benefited from sales increases of $9 million primarily due to higher demand for industrial vehicle products.

Operating income in the second quarter increased $6approximately $1 million, or ~~31%~~2%, to ~~$25~~$32 million ~~during the three months ended March 31, 2022 compared to~~from the prior year period, ~~while~~and operating margin decreased 40 basis points to 15.6%, as favorable absorption on higher sales and the benefits of our ongoing operational excellence initiatives were essentially offset by higher research and development investments.

Operating income during the six months ended June 30, 2022 increased $6 million, or 12%, to $57 million from the prior year period, and operating margin increased ~~240~~90 basis points to ~~13.0%~~14.3%. The increases in operating income and operating margin in

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each of the respective periods were primarily due to favorable overhead absorption on higher sales, as well as the benefits of our ongoing operational excellence initiatives.

New orders in the second quarter decreased $8 million, as an increase in new orders for commercial aerospace equipment was more than offset by the timing of new orders for industrial vehicles.

New orders during the ~~three~~six months ended ~~March 31,~~June 30, 2022 increased ~~$29~~$22 million ~~from the comparable prior year period,~~ primarily due to an increase in new orders for ~~industrial vehicles and~~ commercial aerospace equipment. This increase was partially offset by the timing of new orders for industrial vehicles.

Defense Electronics

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

Three Months Ended
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 %)


	Three Months Ended							Six Months Ended
	June 30,							June 30,
(In thousands)	2022			2021			% change	2022			2021			% change
Sales	$	149,549		$	162,351		(8%)	$	292,618		$	343,563		(15%)
Operating income	24,460			29,271			(16%)	47,750			65,894			(28%)
Operating margin	16.4		%	18.0		%	(160 bps)	16.3		%	19.2		%	(290 bps)
New orders	$	195,442		$	184,033		6%	$	355,130		$	359,773		(1%)

Components of sales and operating income increase (decrease):


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022 vs. 2021					2022 vs. 2021				2022 vs. 2021
		Sales		Operating Income			Sales		Operating Income		Sales		Operating Income
Organic	Organic	(21	%)	(37	%)	Organic	(7	%)	(21	%)	(14	%)	(29	%)
Acquisitions	Acquisitions	—	%	—	%	Acquisitions	—	%	—	%	—	%	—	%
Foreign currency	Foreign currency	—	%	1	%	Foreign currency	(1	%)	5	%	(1	%)	1	%
Total	Total	(21	%)	(36	%)	Total	(8	%)	(16	%)	(15	%)	(28	%)

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

Sales in the second quarter decreased $13 million, or 8%, to $150 million from the prior year period. In the commercial aerospace market, sales decreased $9 million primarily due to lower sales of avionics and flight test equipment on various domestic and international platforms. Sales in the aerospace defense and ground defense markets were negatively impacted by ongoing supply chain headwinds and the delayed signing of the FY22 defense budget. These decreases were partially offset by higher sales on the Virginia-class submarine program in the naval defense market.

Sales during the six months ended June 30, 2022 decreased $51 million, or 15%, to $293 million from the prior year period. In the ground defense market, sales decreased $23 million primarily due to ongoing supply chain headwinds as well as the delayed signing of the FY22 defense budget, which contributed to lower sales of embedded computing and tactical communications equipment on various programs. The aerospace defense market was also negatively impacted by ongoing supply chain headwinds, which resulted in lower sales of $16 million, primarily on embedded computing equipment on various programs. In the commercial aerospace market, sales decreased $10 million primarily due to lower sales of avionics and flight test equipment on various domestic and international platforms.

Operating income in the second quarter decreased $5 million, or 16%, to $24 million compared to the prior year period, and operating margin decreased 160 basis points from the prior year period to 16.4%. Operating income during the six months ended June 30, 2022 decreased $18 million, or 28%, to $48 million, and operating margin decreased 290 basis points from the

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

Sales during the three months ended March 31, 2022 decreased $38 million, or 21%, to $143 million from the prior year period, primarily due to timing across all defense markets. In the ground defense market, 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 delayed signing of the FY22 defense budget, which resulted in lower sales of embedded computing equipment on various programs. Sales in the naval defense market were negatively impacted by the timing of orders on various submarine and surface combat ship programs.

~~Operating income~~ ~~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 for each of the respective periods were primarily due to unfavorable overhead absorption on lower ~~sales and unfavorable mix.~~sales.

New orders~~during~~ in the ~~three months ended March 31, 2022 decreased $23~~second quarter increased $11 million, ~~from the comparable prior year period,~~ primarily due to an increase in new orders for commercial aerospace equipment.

New orders during the six months ended June 30, 2022 decreased $5 million, as an increase in new orders for commercial aerospace equipment was more than offset by the timing of orders across all defense-related markets due to ~~ongoing supply chain disruption.~~the delayed signing of the FY22 defense budget.

Naval & Power

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


		Three Months Ended									Three Months Ended							Six Months Ended
		March 31,									June 30,							June 30,
(In thousands)	(In thousands)	2022			2021			% change		(In thousands)	2022			2021			% change	2022			2021			% change
Sales	Sales	$	225,280		$	235,516		(4	%)	Sales	$	251,236		$	259,431		(3%)	$	476,516		$	494,947		(4%)
Operating income	Operating income	27,288			38,057			(28	%)	Operating income	50,001			43,095			16%	77,289			81,152			(5%)
Operating margin	Operating margin	12.1		%	16.2		%	(410	bps)	Operating margin	19.9		%	16.6		%	330 bps	16.2		%	16.4		%	(20 bps)
New orders	New orders	$	246,263		$	198,032		24	%	New orders	$	365,441		$	292,112		25%	$	611,705		$	490,144		25%

Components of sales and operating income increase (decrease):


		Three Months Ended					Three Months Ended				Six Months Ended
		March 31,					June 30,				June 30,
		2022 vs. 2021					2022 vs. 2021				2022 vs. 2021
		Sales		Operating Income			Sales		Operating Income		Sales		Operating Income
Organic	Organic	(4	%)	(14	%)	Organic	(3	%)	15	%	(4	%)	2	%
Acquisitions	Acquisitions	—	%	—	%	Acquisitions	—	%	—	%	—	%	—	%
Loss on divestiture	Loss on divestiture	—	%	(14	%)	Loss on divestiture	—	%	—	%	—	%	(7	%)
Foreign currency	Foreign currency	—	%	—	%	Foreign currency	—	%	1	%	—	%	—	%
Total	Total	(4	%)	(28	%)	Total	(3	%)	16	%	(4	%)	(5	%)

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

Sales ~~during~~in the ~~three months ended March 31, 2022~~ second quarter decreased ~~$11~~$8 million, or 4%3%, to ~~$225~~$251 million from the prior year period. In the naval defense market, sales decreased $6$7 million, ~~primarily due to~~as higher demand on the Columbia-class submarine and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine ~~programs, partially~~programs. In the power & process market, higher nuclear aftermarket sales as well as higher demand for industrial valve products were essentially offset by the wind-down on the China Direct AP1000 program.

Sales during the six months ended June 30, 2022 decreased $18 million, or 4%, to $477 million from the prior year period. Sales decreased $14 million in the naval defense market, as higher demand on the Columbia-class submarine ~~program.~~and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs. In the power & process market, higher nuclear aftermarket sales were more than offset by the ~~wind down~~wind-down on the China Direct AP1000 program.

Operating income in the second quarter increased $7 million, or 16%, to $50 million, and operating margin increased 330 basis points from the prior year period to 19.9%, primarily due to favorable mix in the naval defense and process markets, as well as the benefits of our ongoing operational excellence initiatives.

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Operating income during the ~~three~~six months ended ~~March 31,~~June 30, 2022 decreased ~~$11~~$4 million, or ~~28%~~5%, to ~~$27~~$77 million, and operating margin decreased ~~410~~20 basis points from the prior year period to ~~12.1%~~16.2%. ~~The decreases in~~Both operating income and operating margin were ~~primarily due to~~negatively impacted by a loss on sale of our industrial valves business in Germany in the current period, as well as unfavorable overhead absorption on lower sales in the naval defense ~~market, and unfavorable~~market. These decreases were partially offset by favorable mix in the ~~power &~~naval defense and process ~~market.~~markets, as well as the benefits of our ongoing operational excellence initiatives.

New orders ~~increased~~ ~~$48 million~~ ~~during~~in the ~~three~~second quarter and six months ended ~~March 31,~~June 30, 2022 increased $73 million and $122 million, respectively, from the comparable prior year ~~period,~~periods, 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.


Net Sales by End Market and Customer Type		Three Months Ended
Total Net Sales by End Market and Customer Type								Total Net Sales by End Market and Customer Type	Three Months Ended						Six Months Ended
		March 31,							June 30,						June 30,
(In thousands)	(In thousands)	2022		2021		% change		(In thousands)	2022		2021		% change		2022		2021		% change
Aerospace & Defense markets:	Aerospace & Defense markets:							Aerospace & Defense markets:
Aerospace Defense	Aerospace Defense	$	98,004	$	111,016	(12	%)	Aerospace Defense	$	94,545	$	99,977	(5	%)	$	192,549	$	210,993	(9	%)
Ground Defense	Ground Defense	39,108		55,746		(30	%)	Ground Defense	44,393		48,221		(8	%)	83,501		103,967		(20	%)
Naval Defense	Naval Defense	162,967		177,905		(8	%)	Naval Defense	172,786		177,724		(3	%)	335,753		355,629		(6	%)
Commercial Aerospace	Commercial Aerospace	60,892		57,269		6	%	Commercial Aerospace	68,192		71,555		(5	%)	129,084		128,824		—	%
Total Aerospace & Defense	Total Aerospace & Defense	$	360,971	$	401,936	(10	%)	Total Aerospace & Defense	$	379,916	$	397,477	(4	%)	$	740,887	$	799,413	(7	%)

Commercial markets:	Commercial markets:							Commercial markets:
Power & Process	Power & Process	104,788		105,504		(1	%)	Power & Process	$	125,355	$	125,333	—	%	$	230,143	$	230,837	—	%
General Industrial	General Industrial	93,702		89,619		5	%	General Industrial	104,086		98,685		5	%	197,788		188,304		5	%
Total Commercial	Total Commercial	$	198,490	$	195,123	2	%	Total Commercial	$	229,441	$	224,018	2	%	$	427,931	$	419,141	2	%

Total Curtiss-Wright	Total Curtiss-Wright	$	559,461	$	597,059	(6	%)	Total Curtiss-Wright	$	609,357	$	621,495	(2	%)	$	1,168,818	$	1,218,554	(4	%)

Aerospace & Defense markets

Sales in the second quarter decreased $18 million, or 4%, to $380 million against the comparable prior year period, due to lower sales across all markets. Sales in the aerospace defense market decreased primarily due to lower sales of actuation and sensors products on various fighter jet programs, as well as lower sales of embedded computing equipment on various fighter jet and helicopter platforms. The ground defense market was negatively impacted by ongoing supply chain headwinds and the delayed signing of the FY22 defense budget, which resulted in lower sales of tactical communications equipment. In the naval defense market, higher demand on the Columbia-class submarine and CVN-81 aircraft carrier programs was more than offset by lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs. Sales in the commercial aerospace market were negatively impacted by lower sales of avionics and flight test equipment on various domestic and international platforms, partially offset by higher demand for actuation and sensors products as well as surface treatment services on various narrow-body and wide-body platforms.

Sales during the ~~three~~six months ended ~~March 31,~~June 30, 2022 decreased ~~$41~~$59 million, or ~~10%~~7%, to ~~$361~~$741 million, primarily due to lower sales in the aerospace defense, ground defense, and naval defense markets. Sales in the aerospace defense and ground defense markets decreased primarily due to ~~timing~~ongoing supply chain headwinds and the delayed signing of ~~sales of embedded computing and tactical communications equipment on various programs~~ the FY22 defense budget. Sales decreases in the naval defense market were primarily due to lower sales on the CVN-80 aircraft carrier and Virginia-class submarine programs, partially offset by higher demand on the Columbia-class submarine ~~program.~~and CVN-81 aircraft carrier programs.

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Commercial markets

Sales ~~during~~in the ~~three months ended March 31, 2022~~second quarter increased $3$5 million, or 2%, to ~~$198~~$229 million primarily due to higher demand for our industrial vehicle products in the general industrial market.

Sales during the six months ended June 30, 2022 increased $9 million, or 2%, to $428 million primarily due to higher demand for our industrial vehicle products in the general industrial market. In the power & process market, higher nuclear aftermarket sales were offset by the wind-down on the China Direct AP1000 program.

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,

~~Page 23~~

~~CURTISS-WRIGHT CORPORATION and SUBSIDIARIES~~

~~PART I - ITEM 2~~

~~MANAGEMENT’S DISCUSSION and ANALYSIS of~~

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

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	Three Months Ended				Condensed Consolidated Statements of Cash Flows	Six Months Ended
(In thousands)	(In thousands)	March 31, 2022		March 31, 2021		(In thousands)	June 30, 2022		June 30, 2021
Cash provided by (used in):
Cash provided by (used for):						Cash provided by (used for):
Operating activities	Operating activities	$	(124,315)	$	(26,603)	Operating activities	$	(93,271)	$	48,476
Investing activities	Investing activities	(10,391)		(12,855)		Investing activities	(18,235)		(20,129)
Financing activities	Financing activities	106,179		(7,107)		Financing activities	118,120		(26,899)
Effect of exchange-rate changes on cash	Effect of exchange-rate changes on cash	(5,795)		(4,614)		Effect of exchange-rate changes on cash	(6,204)		(2,188)
Net decrease in cash and cash equivalents		(34,322)		(51,179)
Net increase (decrease) in cash and cash equivalents						Net increase (decrease) in cash and cash equivalents	410		(740)

Net cash ~~used in~~provided by operating activities ~~increased $98~~decreased $142 million from the prior year period, primarily due to ~~lower net earnings, higher inventory receipts,~~ the timing of advanced cash receipts, higher inventory receipts, and a legal settlement payment made to WEC during the current period.

Net cash used infor investing activities decreased $2$2 million from the prior year period, primarily due to higher current period proceeds from disposal of long-lived assets.

Net cash provided by financing activities increased ~~$113~~$145 million from the prior year period, primarily due to higher current period net borrowings ~~of $120 million~~ under our ~~revolving credit facility.~~Credit Agreement. Refer to the "Financing Activities" section below for further details.

Financing Activities

Debt

The Corporation’s debt outstanding had an average interest rate of 3.2% for both the three and six months ended June 30, 2022, and 3.5% for both the three and six months ended ~~March 31, 2022 and~~June 30, 2021, respectively. The Corporation’s average debt outstanding was ~~$1,112 million and $1,057 million~~$1.2 billion for both the three and six months ended ~~March 31,~~June 30, 2022, and $1.1 billion for both the three and six months ended June 30, 2021, respectively.

Revolving Credit Agreement

In May 2022, the Corporation terminated its existing credit agreement, which was set to expire in October 2023, and entered into a new Credit Agreement with a syndicate of financial institutions. The Credit Agreement, which is set to expire in May

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2027, increases the size of the Corporation’s revolving credit facility to $750 million, and expands the accordion feature to $250 million.

As of ~~March 31,~~June 30, 2022, the Corporation had ~~$214~~$253 million of outstanding borrowings under the ~~2012 Senior Unsecured Revolving~~ Credit Agreement, ~~(the “Credit Agreement” or “credit facility”)~~ and ~~approximately $19~~$17 million in letters of credit supported by the ~~credit facility.~~Credit Agreement. The unused credit available under the Credit Agreement as of ~~March 31,~~June 30, 2022 was ~~$267~~$480 million, which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the ~~three~~six months ended ~~March 31,~~June 30, 2022, the Corporation used ~~$19~~$32 million of cash to repurchase approximately ~~0.1~~0.2 million outstanding shares under its share repurchase program. During the ~~three~~six months ended ~~March 31,~~June 30, 2021, the Corporation used ~~$12~~$24 million of cash to repurchase approximately ~~0.1~~0.2 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~~The Corporation made dividend payments of $14 million and ~~SUBSIDIARIES~~

~~PART I - ITEM 2~~

~~MANAGEMENT’S DISCUSSION~~$7 million during the six months ended June 30, 2022 and ~~ANALYSIS~~June 30, 2021, respectively, with the increase primarily due to timing of

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

the quarterly dividend payment during the current period. Additionally, beginning in the second quarter, the Corporation increased its quarterly dividend 6% to $0.19 per share.

Debt Compliance

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

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

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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 2021 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 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.

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Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risk during the ~~three~~six months ended ~~March 31,~~June 30, 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 2021 Annual Report on Form 10-K.

Item 4. CONTROLS AND PROCEDURES

As of ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 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 ~~March 31,~~June 30, 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.

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PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we 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. We continue 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, 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 and the relatively non-friable condition of asbestos in our products make it unlikely that we will face material liability in any asbestos litigation, whether individually or in the aggregate. We maintain insurance coverage 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 ~~three~~six months ended ~~March 31,~~June 30, 2022. Information regarding our Risk Factors is more fully described in "Item 1A. Risk Factors" of our 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 ~~March 31,~~June 30, 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
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


	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	29,197	$150.57	163,349	$	233,753,889
May 1 - May 31	29,793	$140.85	193,142	$	229,557,422
June 1 - June 30	31,040	$135.16	224,182	$	225,362,016
For the quarter ended June 30, 2022	90,030	$142.04	224,182	$	225,362,016

In December 2021, the Corporation adopted two written trading plans in connection with its previously authorized share repurchase program, which allowed for the purchase of its outstanding common stock up to $550 million, of which ~~$238~~$225 million remains available for repurchase as of ~~March 31,~~June 30, 2022. The first trading plan includes share repurchases of $50 million, to be executed equally throughout the 2022 calendar year. The second trading plan, which included opportunistic share repurchases up to $100 million ~~and~~to be executed through a 10b5-1 ~~program,~~plan, 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

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

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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. Bamford, ~~President~~Chair 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. Bamford, ~~President~~Chair 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

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

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