Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 31, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-134 | |
Entity Registrant Name | CURTISS-WRIGHT CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-0612970 | |
Entity Address, Address Line One | 130 Harbour Place Drive, Suite 300 | |
Entity Address, City or Town | Davidson, | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28036 | |
City Area Code | 704 | |
Local Phone Number | 869-4600 | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | CW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Small Business | false | |
Emerging Company | false | |
Entity Shell Company | false | |
Entity common stock shares outstanding | 38,305,442 | |
Entity Central Index Key | 0000026324 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Net Sales | ||||
Sales | $ 704,396 | $ 609,357 | $ 1,335,256 | $ 1,168,818 |
Cost of sales | ||||
Total cost of sales | 444,823 | 380,843 | 854,275 | 738,902 |
Gross profit | 259,573 | 228,514 | 480,981 | 429,916 |
Research and development expenses | 20,210 | 23,868 | 42,234 | 44,417 |
Selling expenses | 34,273 | 30,407 | 66,698 | 58,499 |
General and administrative expenses | 92,315 | 76,134 | 180,659 | 163,734 |
Loss on divestiture | 0 | 0 | 0 | 4,651 |
Operating income | 112,775 | 98,105 | 191,390 | 158,615 |
Interest expense | (14,992) | (9,788) | (27,936) | (19,318) |
Other income, net | 7,954 | 4,555 | 15,721 | 7,552 |
Earnings before income taxes | 105,737 | 92,872 | 179,175 | 146,849 |
Provision for income taxes | (24,738) | (22,000) | (41,330) | (35,292) |
Net earnings | $ 80,999 | $ 70,872 | $ 137,845 | $ 111,557 |
Basic earnings per share | ||||
Basic earnings per share (usd per share) | $ 2.11 | $ 1.84 | $ 3.60 | $ 2.90 |
Diluted earnings per share | ||||
Diluted earnings per share (usd per share) | 2.10 | 1.83 | 3.58 | 2.89 |
Dividends per share | $ 0.20 | $ 0.19 | $ 0.39 | $ 0.37 |
Weighted average shares outstanding: | ||||
Basic (shares) | 38,329 | 38,429 | 38,309 | 38,438 |
Diluted (shares) | 38,555 | 38,654 | 38,528 | 38,657 |
Retained Earnings | ||||
Cost of sales | ||||
Net earnings | $ 80,999 | $ 70,872 | $ 137,845 | $ 111,557 |
Product [Member] | ||||
Net Sales | ||||
Sales | 583,036 | 505,416 | 1,107,917 | 958,837 |
Cost of sales | ||||
Cost of Goods and Services Sold | 369,549 | 316,389 | 713,306 | 610,916 |
Service [Member] | ||||
Net Sales | ||||
Sales | 121,360 | 103,941 | 227,339 | 209,981 |
Cost of sales | ||||
Cost of Goods and Services Sold | $ 75,274 | $ 64,454 | $ 140,969 | $ 127,986 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net earnings | $ 80,999 | $ 70,872 | $ 137,845 | $ 111,557 | |
Other comprehensive income | |||||
Foreign currency translation, net of tax | [1] | 19,298 | (40,336) | 33,964 | (47,161) |
Pension and postretirement adjustments, net of tax | [1] | (231) | 3,988 | (423) | 9,754 |
Other comprehensive income (loss), net of tax | 19,067 | (36,348) | 33,541 | (37,407) | |
Comprehensive income | $ 100,066 | $ 34,524 | $ 171,386 | $ 74,150 | |
[1]The tax benefit (expense) included in foreign currency translation adjustments and pension and postretirement adjustments for the three and six months ended June 30, 2023 and June 30, 2022 was immaterial. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 158,737 | $ 256,974 |
Receivables, net | 751,532 | 724,603 |
Inventories, net | 545,596 | 483,113 |
Other current assets | 67,693 | 52,623 |
Total current assets | 1,523,558 | 1,517,313 |
Property, plant, and equipment, net | 340,857 | 342,708 |
Goodwill | 1,555,908 | 1,544,635 |
Other intangible assets, net | 589,932 | 620,897 |
Operating lease right-of-use assets, net | 143,814 | 153,855 |
Prepaid pension asset | 232,557 | 222,627 |
Other assets | 54,472 | 47,567 |
Total assets | 4,441,098 | 4,449,602 |
Current liabilities: | ||
Current portion of long-term debt | 0 | 202,500 |
Accounts payable | 233,602 | 266,525 |
Accrued expenses | 144,073 | 177,536 |
Deferred revenue | 264,766 | 242,483 |
Other current liabilities | 78,486 | 82,395 |
Total current liabilities | 720,927 | 971,439 |
Long-term debt | 1,176,066 | 1,051,900 |
Deferred tax liabilities, net | 117,882 | 123,001 |
Accrued pension and other postretirement benefit costs | 58,267 | 58,348 |
Long-term operating lease liability | 122,939 | 132,275 |
Long-term portion of environmental reserves | 13,497 | 12,547 |
Other liabilities | 93,256 | 107,973 |
Total liabilities | 2,302,834 | 2,457,483 |
Stockholders' Equity | ||
Common stock, $1 par value, 100,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 49,187,378 shares issued as of June 30, 2023 and December 31, 2022; outstanding shares were 38,292,332 as of June 30, 2023 and 38,259,722 as of December 31, 2022 | 49,187 | 49,187 |
Additional paid in capital | 130,846 | 134,553 |
Retained earnings | 3,297,281 | 3,174,396 |
Accumulated other comprehensive loss | (225,375) | (258,916) |
Common treasury stock, at cost (10,895,046 shares as of June 30, 2023 and 10,927,656 shares as of December 31, 2022) | (1,113,675) | (1,107,101) |
Total stockholders’ equity | 2,138,264 | 1,992,119 |
Total liabilities and stockholders’ equity | $ 4,441,098 | $ 4,449,602 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (usd per share) | $ 1 | $ 1 |
Common Stock, Shares Authorized (in shares) | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued (in shares) | 49,187,378 | 49,187,378 |
Common Stock, Shares, Outstanding (in shares) | 38,292,332 | 38,259,722 |
Treasury Stock, Common, Shares (in shares) | 10,895,046 | 10,927,656 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net earnings | $ 137,845 | $ 111,557 |
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities | ||
Depreciation and amortization | 57,975 | 53,645 |
Loss on divestiture | 0 | 4,651 |
Loss/(gain) on sale/disposal of long-lived assets | 16 | (3,004) |
Deferred income taxes | (6,553) | (4,516) |
Share-based compensation | 8,859 | 7,580 |
Change in operating assets and liabilities, net of businesses acquired and divested: | ||
Accounts receivable, net | (22,370) | (47,826) |
Inventories, net | (57,557) | (58,620) |
Progress Payments | 1,830 | (954) |
Accounts payable and accrued expenses | (72,019) | (55,406) |
Deferred revenue | 21,586 | (45,397) |
Net pension and postretirement liabilities | (9,392) | (4,376) |
Other current and long-term assets and liabilities | (40,867) | (50,605) |
Net cash provided by (used for) operating activities | 19,353 | (93,271) |
Cash flows from investing activities: | ||
Proceeds from sale/disposal of long-lived assets | 473 | 6,319 |
Additions to property, plant, and equipment | (22,664) | (19,492) |
Payments for Previous Acquisition | 0 | 5,062 |
Net cash used for investing activities | (22,191) | (18,235) |
Cash flows from financing activities: | ||
Borrowings under revolving credit facility | 481,099 | 653,547 |
Payments of revolving credit facilities | (356,099) | (494,347) |
Principal payments on debt | (202,500) | 0 |
Repurchases of common stock | (24,365) | (31,645) |
Proceeds from share-based compensation | 5,225 | 5,284 |
Dividends paid | (7,290) | (14,220) |
Proceeds from (Payments for) Other Financing Activities | (537) | (499) |
Net cash (used for)/provided by financing activities | (104,467) | 118,120 |
Effect of exchange-rate changes on cash | 9,068 | (6,204) |
Net increase (decrease) in cash and cash equivalents | (98,237) | 410 |
Cash and cash equivalents at beginning of period | 256,974 | 171,004 |
Cash and cash equivalents at end of period | $ 158,737 | $ 171,414 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | |
Beginning Balance at Dec. 31, 2021 | $ 49,187 | $ 127,104 | $ 2,908,827 | $ (190,465) | $ (1,068,163) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 111,557 | 111,557 | |||||
Other Comprehensive Income (Loss), Net of Tax | (37,407) | (37,407) | |||||
Dividends paid | (14,220) | ||||||
Restricted stock | (8,523) | 8,523 | |||||
Employee stock purchase plan | 814 | 4,470 | |||||
Share-based compensation | 7,427 | 153 | |||||
Repurchases of common stock | [1] | (31,645) | |||||
Other | (506) | 506 | |||||
Ending Balance at Jun. 30, 2022 | 49,187 | 126,316 | 3,006,164 | (227,872) | (1,086,156) | ||
Beginning Balance at Dec. 31, 2021 | 49,187 | 127,104 | 2,908,827 | (190,465) | (1,068,163) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Other Comprehensive Income (Loss), Net of Tax | (68,451) | ||||||
Ending Balance at Dec. 31, 2022 | 1,992,119 | 49,187 | 134,553 | 3,174,396 | (258,916) | (1,107,101) | |
Beginning Balance at Mar. 31, 2022 | 49,187 | 122,603 | 2,942,580 | (191,524) | (1,073,426) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 70,872 | 70,872 | |||||
Other Comprehensive Income (Loss), Net of Tax | (36,348) | (36,348) | |||||
Dividends paid | (7,288) | ||||||
Share-based compensation | 3,713 | 58 | |||||
Repurchases of common stock | [1] | (12,788) | |||||
Ending Balance at Jun. 30, 2022 | 49,187 | 126,316 | 3,006,164 | (227,872) | (1,086,156) | ||
Beginning Balance at Dec. 31, 2022 | 1,992,119 | 49,187 | 134,553 | 3,174,396 | (258,916) | (1,107,101) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 137,845 | 137,845 | |||||
Other Comprehensive Income (Loss), Net of Tax | 33,541 | 33,541 | |||||
Dividends paid | (14,960) | ||||||
Restricted stock | (13,878) | 13,878 | |||||
Employee stock purchase plan | 1,483 | 3,742 | |||||
Share-based compensation | 8,949 | (90) | |||||
Repurchases of common stock | (24,365) | ||||||
Other | (261) | 261 | |||||
Ending Balance at Jun. 30, 2023 | 2,138,264 | 49,187 | 130,846 | 3,297,281 | (225,375) | (1,113,675) | |
Beginning Balance at Mar. 31, 2023 | 49,187 | 126,909 | 3,223,944 | (244,442) | (1,101,439) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 80,999 | 80,999 | |||||
Other Comprehensive Income (Loss), Net of Tax | 19,067 | 19,067 | |||||
Dividends paid | (7,662) | ||||||
Restricted stock | (73) | 73 | |||||
Share-based compensation | 4,010 | (330) | |||||
Repurchases of common stock | (11,979) | ||||||
Ending Balance at Jun. 30, 2023 | $ 2,138,264 | $ 49,187 | $ 130,846 | $ 3,297,281 | $ (225,375) | $ (1,113,675) | |
[1]For the three and six months ended June 30, 2023, the Corporation repurchased approximately 0.1 million and 0.1 million shares of its common stock, respectively. For the three and six months ended June 30, 2022, the Corporation repurchased approximately 0.1 million and 0.2 million shares of its common stock, respectively. |
STATEMENT OF STOCKHOLDERS' EQUI
STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Treasury Stock, Shares, Acquired | 0.1 | 0.1 | 0.1 | 0.2 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Curtiss-Wright Corporation along with its subsidiaries (we, the Corporation, or the Company) is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets. The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. The unaudited condensed consolidated financial statements of the Corporation have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted as permitted by such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of these financial statements. Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete using the over-time revenue recognition accounting method, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2023 and 2022, there were no significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 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 June 30, 2023 and 2022: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Over-time 46 % 53 % 47 % 53 % Point-in-time 54 % 47 % 53 % 47 % 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 $2.8 billion as of June 30, 2023, of which the Corporation expects to recognize approximately 90% as net sales over the next 36 months. The remainder will be recognized thereafter. Disaggregation of Revenue The following table presents the Corporation’s total net sales disaggregated by end market and customer type: Total Net Sales by End Market and Customer Type Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Aerospace & Defense Aerospace Defense $ 132,192 $ 94,545 $ 232,071 $ 192,549 Ground Defense 70,875 44,393 137,132 83,501 Naval Defense 180,956 172,786 352,912 335,753 Commercial Aerospace 82,033 68,192 152,523 129,084 Total Aerospace & Defense $ 466,056 $ 379,916 $ 874,638 $ 740,887 Commercial Power & Process $ 131,000 $ 125,355 $ 251,338 $ 230,143 General Industrial 107,340 104,086 209,280 197,788 Total Commercial $ 238,340 $ 229,441 $ 460,618 $ 427,931 Total $ 704,396 $ 609,357 $ 1,335,256 $ 1,168,818 Contract Balances Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the three and six months ended June 30, 2023 included in the contract liabilities balance as of January 1, 2023 was approximately $58 million and $147 million, respectively. Revenue recognized during the three and six months ended June 30, 2022 included in the contract liabilities balance as of January 1, 2022 was approximately $56 million and $135 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 6 Months Ended |
Jun. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALEIn January 2022, the Corporation completed the sale of its industrial valve business in Germany for gross cash proceeds of $3 million. The Corporation recorded a loss of $5 million upon sale closing during the first quarter of 2022. |
RECEIVABLES
RECEIVABLES | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
RECEIVABLES | 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) June 30, 2023 December 31, 2022 Billed receivables: Trade and other receivables $ 434,557 $ 412,682 Unbilled receivables (contract assets): Recoverable costs and estimated earnings not billed 322,025 316,682 Less: Progress payments applied (435) (67) Net unbilled receivables 321,590 316,615 Less: Allowance for doubtful accounts (4,615) (4,694) Receivables, net $ 751,532 $ 724,603 |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2023 | |
Inventory, Net [Abstract] | |
INVENTORIES | 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) June 30, 2023 December 31, 2022 Raw materials $ 252,666 $ 242,116 Work-in-process 102,339 76,328 Finished goods 148,493 128,090 Inventoried costs related to U.S. Government and other long-term contracts (1) 44,872 39,685 Inventories, net of reserves 548,370 486,219 Less: Progress payments applied (2,774) (3,106) Inventories, net $ 545,596 $ 483,113 (1) This caption includes capitalized development costs of $15.5 million as of June 30, 2023 related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of June 30, 2023, capitalized development costs of $8.3 million are not currently supported by existing firm orders. |
GOODWILL
GOODWILL | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill [Abstract] | |
GOODWILL | GOODWILL The changes in the carrying amount of goodwill for the six months ended June 30, 2023 are as follows: (In thousands) Aerospace & Industrial Defense Electronics Naval & Power Consolidated December 31, 2022 $ 321,550 $ 702,786 $ 520,299 $ 1,544,635 Foreign currency translation adjustment 3,070 5,473 2,730 11,273 June 30, 2023 $ 324,620 $ 708,259 $ 523,029 $ 1,555,908 |
OTHER INTANGIBLE ASSETS, NET
OTHER INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
OTHER INTANGIBLE ASSETS, NET | OTHER INTANGIBLE ASSETS, NET The following tables present the cumulative composition of the Corporation’s intangible assets: June 30, 2023 December 31, 2022 (In thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Technology $ 309,627 $ (188,261) $ 121,366 $ 306,160 $ (176,675) $ 129,485 Customer related intangibles 670,523 (320,041) 350,482 666,638 (298,160) 368,478 Programs (1) 144,000 (37,800) 106,200 144,000 (34,200) 109,800 Other intangible assets 54,187 (42,303) 11,884 53,879 (40,745) 13,134 Total $ 1,178,337 $ (588,405) $ 589,932 $ 1,170,677 $ (549,780) $ 620,897 (1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. Total intangible amortization expense for the six months ended June 30, 2023 was $33 million, as compared to $28 million in the comparable prior year period. The estimated future amortization expense of intangible assets over the next five years is as follows: (In millions) 2023 $ 65 2024 $ 57 2025 $ 54 2026 $ 53 2027 $ 50 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Forward Foreign Exchange and Currency Option Contracts The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada. The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions. The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations. Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments. Interest Rate Risks and Related Strategies The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt. Effects on Condensed Consolidated Balance Sheets As of June 30, 2023 and December 31, 2022, the fair values of the asset and liability derivative instruments were immaterial. Effects on Condensed Consolidated Statements of Earnings Undesignated hedges The gains and losses on forward exchange derivative contracts not designated for hedge accounting are recognized to general and administrative expenses within the Condensed Consolidated Statements of Earnings. The gains for the three and six months ended June 30, 2023 were $3 million and $6 million, respectively. The losses for the three and six months ended June 30, 2022 were $5 million and $6 million, respectfully. Debt The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of June 30, 2023. 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. June 30, 2023 December 31, 2022 (In thousands) Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Revolving credit agreement, due 2027 $ 125,000 $ 125,000 $ — $ — 3.70% Senior notes due 2023 — — 202,500 202,082 3.85% Senior notes due 2025 90,000 86,918 90,000 87,298 4.24% Senior notes due 2026 200,000 192,590 200,000 191,760 4.05% Senior notes due 2028 67,500 63,748 67,500 63,300 4.11% Senior notes due 2028 90,000 84,628 90,000 83,955 3.10% Senior notes due 2030 150,000 128,742 150,000 127,429 3.20% Senior notes due 2032 150,000 124,306 150,000 123,656 4.49% Senior notes due 2032 200,000 183,150 200,000 183,007 4.64% Senior notes due 2034 100,000 90,700 100,000 90,341 Total debt 1,172,500 1,079,782 1,250,000 1,152,828 Debt issuance costs, net (1,651) (1,651) (1,631) (1,631) Unamortized interest rate swap proceeds 5,217 5,217 6,031 6,031 Total debt, net $ 1,176,066 $ 1,083,348 $ 1,254,400 $ 1,157,228 |
PENSION PLANS
PENSION PLANS | 6 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits, Description [Abstract] | |
PENSION PLANS | 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 2022 Annual Report on Form 10-K. The components of net periodic pension cost for the three and six months ended June 30, 2023 and 2022 were as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Service cost $ 4,137 $ 5,970 $ 8,264 $ 12,033 Interest cost 8,811 5,418 17,601 10,706 Expected return on plan assets (15,858) (13,858) (31,678) (27,715) Amortization of prior service cost (33) (87) (66) (173) Amortization of unrecognized actuarial loss 76 3,845 153 7,851 Cost of settlements — — — 1,842 Net periodic pension cost $ (2,867) $ 1,288 $ (5,726) $ 4,544 The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the six months ended June 30, 2023, and does not expect to do so throughout the remainder of the year. Contributions to the foreign benefit plans are not expected to be material in 2023. During the six months ended June 30, 2022, the Company recognized settlement charges related to the retirement of former executives. The settlement charges represent events that are accounted for under guidance on employers’ accounting for settlements and curtailments of defined benefit pension plans. Defined Contribution Retirement Plan The Company also maintains a defined contribution plan for all non-union employees who are not currently receiving final or career average pay benefits for its U.S. subsidiaries. The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three and six months ended June 30, 2023, the expense relating to the plan was $6.1 million and $12.2 million, respectively. During the three and six months ended June 30, 2022, the expense relating to the plan was $4.6 million and $10.3 million, respectively. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Diluted earnings per share was computed based on the weighted-average number of shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Basic weighted-average shares outstanding 38,329 38,429 38,309 38,438 Dilutive effect of deferred stock compensation 226 225 219 219 Diluted weighted-average shares outstanding 38,555 38,654 38,528 38,657 For the three and six months ended June 30, 2023, approximately 20,000 and 22,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period. There were approximately 37,000 and 31,000 anti-dilutive equity-based awards for the three and six months ended June 30, 2022, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 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. Net sales and operating income by reportable segment were as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Net sales Aerospace & Industrial $ 226,766 $ 209,311 $ 430,352 $ 401,161 Defense Electronics 198,407 150,404 361,477 294,342 Naval & Power 280,731 251,313 547,545 476,628 Less: Intersegment revenues (1,508) (1,671) (4,118) (3,313) Total consolidated $ 704,396 $ 609,357 $ 1,335,256 $ 1,168,818 Operating income (expense) Aerospace & Industrial $ 35,665 $ 32,464 $ 62,210 $ 57,317 Defense Electronics 43,180 24,460 66,548 47,750 Naval & Power 46,782 50,001 84,719 77,289 Corporate and other (1) (12,852) (8,820) (22,087) (23,741) Total consolidated $ 112,775 $ 98,105 $ 191,390 $ 158,615 (1) Includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses. Adjustments to reconcile operating income to earnings before income taxes are as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Total operating income $ 112,775 $ 98,105 $ 191,390 $ 158,615 Interest expense 14,992 9,788 27,936 19,318 Other income, net 7,954 4,555 15,721 7,552 Earnings before income taxes $ 105,737 $ 92,872 $ 179,175 $ 146,849 (In thousands) June 30, 2023 December 31, 2022 Identifiable assets Aerospace & Industrial $ 1,064,442 $ 1,041,562 Defense Electronics 1,567,053 1,546,331 Naval & Power 1,517,090 1,488,867 Corporate and Other 292,513 372,842 Total consolidated $ 4,441,098 $ 4,449,602 |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 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, 2021 $ (99,566) $ (90,899) $ (190,465) Other comprehensive income (loss) before reclassifications (1) (61,241) (23,447) (84,688) Amounts reclassified from accumulated other comprehensive income (1) — 16,237 16,237 Net current period other comprehensive income (loss) (61,241) (7,210) (68,451) December 31, 2022 $ (160,807) $ (98,109) $ (258,916) Other comprehensive income (loss) before reclassifications (1) 33,964 (485) 33,479 Amounts reclassified from accumulated other comprehensive income (1) — 62 62 Net current period other comprehensive income (loss) 33,964 (423) 33,541 June 30, 2023 $ (126,843) $ (98,532) $ (225,375) (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 $ 66 Other income, net Amortization of actuarial losses (153) Other income, net (87) Earnings before income taxes 25 Provision for income taxes Total reclassifications $ (62) Net earnings |
CONTINGENCIES AND COMMITMENTS
CONTINGENCIES AND COMMITMENTS | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES AND COMMITMENTS | CONTINGENCIES AND COMMITMENTS From time to time, the Corporation and its subsidiaries are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues, commercial or contractual disputes, and acquisitions or divestitures. The Corporation continues to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, the Corporation does not expect that such legal proceedings will have a material adverse impact on its condensed consolidated financial 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 secure advance payments from certain international customers. As of June 30, 2023 and December 31, 2022, there were $21 million and $17 million of stand-by letters of credit outstanding, respectively, and $14 million and $3 million of bank guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility. The Corporation has provided this financial assurance in the form of a $35 million surety bond. AP1000 Program In February 2022, the Corporation and Westinghouse Electric Company (WEC) executed a settlement agreement to resolve all open claims and counterclaims under the AP1000 U.S. and China contracts. Under the terms of the settlement agreement, the Corporation paid WEC $15 million in the first quarter of 2022 and a final amount of $10 million in the first quarter of 2023 in exchange for the Corporation’s full release from all open claims under such contracts, whether known or unknown, as well as negotiating and executing a right of first refusal for all future AP1000 projects. ****** |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Accounting | Curtiss-Wright Corporation along with its subsidiaries (we, the Corporation, or the Company) is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets. The unaudited condensed consolidated financial statements include the accounts of Curtiss-Wright and its majority-owned subsidiaries. All intercompany transactions and accounts have been eliminated. The unaudited condensed consolidated financial statements of the Corporation have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted as permitted by such rules and regulations. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair presentation of these financial statements. Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete using the over-time revenue recognition accounting method, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2023 and 2022, there were no significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements. |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over-time versus at a point-in-time for the three and six months ended June 30, 2023 and 2022: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Over-time 46 % 53 % 47 % 53 % Point-in-time 54 % 47 % 53 % 47 % The following table presents the Corporation’s total net sales disaggregated by end market and customer type: Total Net Sales by End Market and Customer Type Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Aerospace & Defense Aerospace Defense $ 132,192 $ 94,545 $ 232,071 $ 192,549 Ground Defense 70,875 44,393 137,132 83,501 Naval Defense 180,956 172,786 352,912 335,753 Commercial Aerospace 82,033 68,192 152,523 129,084 Total Aerospace & Defense $ 466,056 $ 379,916 $ 874,638 $ 740,887 Commercial Power & Process $ 131,000 $ 125,355 $ 251,338 $ 230,143 General Industrial 107,340 104,086 209,280 197,788 Total Commercial $ 238,340 $ 229,441 $ 460,618 $ 427,931 Total $ 704,396 $ 609,357 $ 1,335,256 $ 1,168,818 |
RECEIVABLES (Table)
RECEIVABLES (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Receivables [Abstract] | |
Schedule Of Accounts Notes Loans And Financing Receivable | The composition of receivables is as follows: (In thousands) June 30, 2023 December 31, 2022 Billed receivables: Trade and other receivables $ 434,557 $ 412,682 Unbilled receivables (contract assets): Recoverable costs and estimated earnings not billed 322,025 316,682 Less: Progress payments applied (435) (67) Net unbilled receivables 321,590 316,615 Less: Allowance for doubtful accounts (4,615) (4,694) Receivables, net $ 751,532 $ 724,603 |
INVENTORIES (Table)
INVENTORIES (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Inventory, Net [Abstract] | |
Schedule Of Inventory | The composition of inventories is as follows: (In thousands) June 30, 2023 December 31, 2022 Raw materials $ 252,666 $ 242,116 Work-in-process 102,339 76,328 Finished goods 148,493 128,090 Inventoried costs related to U.S. Government and other long-term contracts (1) 44,872 39,685 Inventories, net of reserves 548,370 486,219 Less: Progress payments applied (2,774) (3,106) Inventories, net $ 545,596 $ 483,113 |
GOODWILL (Table)
GOODWILL (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill [Abstract] | |
Schedule Of Goodwill | The changes in the carrying amount of goodwill for the six months ended June 30, 2023 are as follows: (In thousands) Aerospace & Industrial Defense Electronics Naval & Power Consolidated December 31, 2022 $ 321,550 $ 702,786 $ 520,299 $ 1,544,635 Foreign currency translation adjustment 3,070 5,473 2,730 11,273 June 30, 2023 $ 324,620 $ 708,259 $ 523,029 $ 1,555,908 |
OTHER INTANGIBLE ASSETS, NET (T
OTHER INTANGIBLE ASSETS, NET (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule Of Intangible Assets By Major Class | The following tables present the cumulative composition of the Corporation’s intangible assets: June 30, 2023 December 31, 2022 (In thousands) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Technology $ 309,627 $ (188,261) $ 121,366 $ 306,160 $ (176,675) $ 129,485 Customer related intangibles 670,523 (320,041) 350,482 666,638 (298,160) 368,478 Programs (1) 144,000 (37,800) 106,200 144,000 (34,200) 109,800 Other intangible assets 54,187 (42,303) 11,884 53,879 (40,745) 13,134 Total $ 1,178,337 $ (588,405) $ 589,932 $ 1,170,677 $ (549,780) $ 620,897 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated future amortization expense of intangible assets over the next five years is as follows: (In millions) 2023 $ 65 2024 $ 57 2025 $ 54 2026 $ 53 2027 $ 50 |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block] | June 30, 2023 December 31, 2022 (In thousands) Carrying Value Estimated Fair Value Carrying Value Estimated Fair Value Revolving credit agreement, due 2027 $ 125,000 $ 125,000 $ — $ — 3.70% Senior notes due 2023 — — 202,500 202,082 3.85% Senior notes due 2025 90,000 86,918 90,000 87,298 4.24% Senior notes due 2026 200,000 192,590 200,000 191,760 4.05% Senior notes due 2028 67,500 63,748 67,500 63,300 4.11% Senior notes due 2028 90,000 84,628 90,000 83,955 3.10% Senior notes due 2030 150,000 128,742 150,000 127,429 3.20% Senior notes due 2032 150,000 124,306 150,000 123,656 4.49% Senior notes due 2032 200,000 183,150 200,000 183,007 4.64% Senior notes due 2034 100,000 90,700 100,000 90,341 Total debt 1,172,500 1,079,782 1,250,000 1,152,828 Debt issuance costs, net (1,651) (1,651) (1,631) (1,631) Unamortized interest rate swap proceeds 5,217 5,217 6,031 6,031 Total debt, net $ 1,176,066 $ 1,083,348 $ 1,254,400 $ 1,157,228 |
PENSION PLANS (Table)
PENSION PLANS (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Pension Plans Defined Benefit [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule Of Defined Benefit Plans Disclosures | The components of net periodic pension cost for the three and six months ended June 30, 2023 and 2022 were as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Service cost $ 4,137 $ 5,970 $ 8,264 $ 12,033 Interest cost 8,811 5,418 17,601 10,706 Expected return on plan assets (15,858) (13,858) (31,678) (27,715) Amortization of prior service cost (33) (87) (66) (173) Amortization of unrecognized actuarial loss 76 3,845 153 7,851 Cost of settlements — — — 1,842 Net periodic pension cost $ (2,867) $ 1,288 $ (5,726) $ 4,544 |
EARNINGS PER SHARE (Table)
EARNINGS PER SHARE (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Basic weighted-average shares outstanding 38,329 38,429 38,309 38,438 Dilutive effect of deferred stock compensation 226 225 219 219 Diluted weighted-average shares outstanding 38,555 38,654 38,528 38,657 |
SEGMENT INFORMATION (Table)
SEGMENT INFORMATION (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule Of Segment Reporting Information By Segment | Net sales and operating income by reportable segment were as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Net sales Aerospace & Industrial $ 226,766 $ 209,311 $ 430,352 $ 401,161 Defense Electronics 198,407 150,404 361,477 294,342 Naval & Power 280,731 251,313 547,545 476,628 Less: Intersegment revenues (1,508) (1,671) (4,118) (3,313) Total consolidated $ 704,396 $ 609,357 $ 1,335,256 $ 1,168,818 Operating income (expense) Aerospace & Industrial $ 35,665 $ 32,464 $ 62,210 $ 57,317 Defense Electronics 43,180 24,460 66,548 47,750 Naval & Power 46,782 50,001 84,719 77,289 Corporate and other (1) (12,852) (8,820) (22,087) (23,741) Total consolidated $ 112,775 $ 98,105 $ 191,390 $ 158,615 (1) Includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses. |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated | Adjustments to reconcile operating income to earnings before income taxes are as follows: Three Months Ended Six Months Ended June 30, June 30, (In thousands) 2023 2022 2023 2022 Total operating income $ 112,775 $ 98,105 $ 191,390 $ 158,615 Interest expense 14,992 9,788 27,936 19,318 Other income, net 7,954 4,555 15,721 7,552 Earnings before income taxes $ 105,737 $ 92,872 $ 179,175 $ 146,849 |
Reconciliation Of Assets From Segment To Consolidated | (In thousands) June 30, 2023 December 31, 2022 Identifiable assets Aerospace & Industrial $ 1,064,442 $ 1,041,562 Defense Electronics 1,567,053 1,546,331 Naval & Power 1,517,090 1,488,867 Corporate and Other 292,513 372,842 Total consolidated $ 4,441,098 $ 4,449,602 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Table) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of 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, 2021 $ (99,566) $ (90,899) $ (190,465) Other comprehensive income (loss) before reclassifications (1) (61,241) (23,447) (84,688) Amounts reclassified from accumulated other comprehensive income (1) — 16,237 16,237 Net current period other comprehensive income (loss) (61,241) (7,210) (68,451) December 31, 2022 $ (160,807) $ (98,109) $ (258,916) Other comprehensive income (loss) before reclassifications (1) 33,964 (485) 33,479 Amounts reclassified from accumulated other comprehensive income (1) — 62 62 Net current period other comprehensive income (loss) 33,964 (423) 33,541 June 30, 2023 $ (126,843) $ (98,532) $ (225,375) |
Reclassification out of Accumulated Other Comprehensive Income | 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 $ 66 Other income, net Amortization of actuarial losses (153) Other income, net (87) Earnings before income taxes 25 Provision for income taxes Total reclassifications $ (62) Net earnings |
REVENUE (Details)
REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 704,396 | $ 609,357 | $ 1,335,256 | $ 1,168,818 |
Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 466,056 | 379,916 | 874,638 | 740,887 |
Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 238,340 | 229,441 | 460,618 | 427,931 |
Aerospace Defense [Member] | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 132,192 | 94,545 | 232,071 | 192,549 |
Ground Defense [Member] | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 70,875 | 44,393 | 137,132 | 83,501 |
Naval Defense [Member] | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 180,956 | 172,786 | 352,912 | 335,753 |
Commercial Aerospace [Member] | Aerospace & Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 82,033 | 68,192 | 152,523 | 129,084 |
Power & Process [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | 131,000 | 125,355 | 251,338 | 230,143 |
General Industrial [Member] | Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Sales | $ 107,340 | $ 104,086 | $ 209,280 | $ 197,788 |
Transferred over Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales, Net, Percent | 46% | 53% | 47% | 53% |
Transferred at Point in Time [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Net Sales, Net, Percent | 54% | 47% | 53% | 47% |
REVENUE (Narrative) (Details)
REVENUE (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | ||||
Contract with Customer, Liability, Revenue Recognized | $ 58 | $ 56 | $ 147 | $ 135 |
Revenue, Remaining Performance Obligation, Amount | $ 2,800 | $ 2,800 | ||
Revenue, Remaining Performance Obligation, Percentage | 90% | 90% | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation | 36 months |
ASSETS HELD FOR SALE (Narrative
ASSETS HELD FOR SALE (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||||
Proceeds from Divestiture of Businesses | $ 3,000 | |||||
Loss on divestiture | $ 0 | $ 0 | $ 5,000 | $ 0 | $ 4,651 |
RECEIVABLES (Detail)
RECEIVABLES (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Billed receivables: | ||
Trade and other receivables | $ 434,557 | $ 412,682 |
Unbilled receivables: | ||
Recoverable costs and estimated earnings not billed | 322,025 | 316,682 |
Less: Progress payments applied | (435) | (67) |
Net unbilled receivables | 321,590 | 316,615 |
Less: Allowance for doubtful accounts | (4,615) | (4,694) |
Receivables, net | $ 751,532 | $ 724,603 |
INVENTORIES (Detail)
INVENTORIES (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Inventory, Net [Abstract] | ||
Inventory, Raw Materials, Net of Reserves | $ 252,666 | $ 242,116 |
Inventory, Work in Process, Net of Reserves | 102,339 | 76,328 |
Inventory, Finished Goods, Net of Reserves | 148,493 | 128,090 |
Inventory For Long-term Contracts Or Programs, Net Of Reserves | 44,872 | 39,685 |
Inventories, Net of Reserves | 548,370 | 486,219 |
Progress Payments Netted Against Inventory for Long-term Contracts or Programs | (2,774) | (3,106) |
Inventory, Net, Total | $ 545,596 | $ 483,113 |
INVENTORIES (Narrative) (Detail
INVENTORIES (Narrative) (Detail) $ in Millions | Jun. 30, 2023 USD ($) |
Inventory, Net [Abstract] | |
Other inventory, capitalized costs | $ 15.5 |
Other inventory capitalized costs not supported by existing firm orders | $ 8.3 |
GOODWILL (Detail)
GOODWILL (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Goodwill [Roll Forward] | |
December 31, 2022 | $ 1,544,635 |
Foreign currency translation adjustment | 11,273 |
June 30, 2023 | 1,555,908 |
Aerospace & Industrial | |
Goodwill [Roll Forward] | |
December 31, 2022 | 321,550 |
Foreign currency translation adjustment | 3,070 |
June 30, 2023 | 324,620 |
Defense Electronics | |
Goodwill [Roll Forward] | |
December 31, 2022 | 702,786 |
Foreign currency translation adjustment | 5,473 |
June 30, 2023 | 708,259 |
Naval & Power | |
Goodwill [Roll Forward] | |
December 31, 2022 | 520,299 |
Foreign currency translation adjustment | 2,730 |
June 30, 2023 | $ 523,029 |
OTHER INTANGIBLE ASSETS, NET (D
OTHER INTANGIBLE ASSETS, NET (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 1,178,337 | $ 1,170,677 |
Accumulated Amortization | (588,405) | (549,780) |
Net | 589,932 | 620,897 |
Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 309,627 | 306,160 |
Accumulated Amortization | (188,261) | (176,675) |
Net | 121,366 | 129,485 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 670,523 | 666,638 |
Accumulated Amortization | (320,041) | (298,160) |
Net | 350,482 | 368,478 |
Contract and Program Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 144,000 | 144,000 |
Accumulated Amortization | (37,800) | (34,200) |
Net | 106,200 | 109,800 |
Other Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 54,187 | 53,879 |
Accumulated Amortization | (42,303) | (40,745) |
Net | $ 11,884 | $ 13,134 |
OTHER INTANGIBLE ASSETS, NET (N
OTHER INTANGIBLE ASSETS, NET (Narrative) (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Finite Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 33 | $ 28 |
Future amortization expense in remainder of fiscal year | 65 | |
Future amortization expense in year one | 57 | |
Future amortization expense in year two | 54 | |
Future amortization expense in year three | 53 | |
Future amortization expense in year four | $ 50 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Income Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
General and Administrative Expense [Member] | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments | $ 3,000 | $ (5,000) | $ 6,000 | $ (6,000) |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Debt) (Detail) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 1,176,066 | $ 1,254,400 |
Long-term Debt, Gross | 1,172,500 | 1,250,000 |
Debt Issuance Costs, Net | (1,651) | (1,631) |
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge | 5,217 | 6,031 |
Estimated Fair Value | 1,083,348 | 1,157,228 |
Revolving Credit Facility [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | 125,000 | 0 |
Estimated Fair Value | 125,000 | 0 |
3.70% Senior notes due 2023 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | 0 | 202,500 |
Estimated Fair Value | $ 0 | 202,082 |
Debt Instrument, Interest Rate, Stated Percentage | 3.70% | |
3.85% Senior notes due 2025 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 90,000 | 90,000 |
Estimated Fair Value | $ 86,918 | 87,298 |
Debt Instrument, Interest Rate, Stated Percentage | 3.85% | |
4.24% Senior notes due 2026 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 200,000 | 200,000 |
Estimated Fair Value | $ 192,590 | 191,760 |
Debt Instrument, Interest Rate, Stated Percentage | 4.24% | |
4.05% Senior notes due 2028 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 67,500 | 67,500 |
Estimated Fair Value | $ 63,748 | 63,300 |
Debt Instrument, Interest Rate, Stated Percentage | 4.05% | |
4.11% Senior notes due 2028 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 90,000 | 90,000 |
Estimated Fair Value | $ 84,628 | 83,955 |
Debt Instrument, Interest Rate, Stated Percentage | 4.11% | |
3.10% Senior notes due 2030 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 150,000 | 150,000 |
Estimated Fair Value | $ 128,742 | 127,429 |
Debt Instrument, Interest Rate, Stated Percentage | 3.10% | |
3.20% Senior notes due 2032 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 150,000 | 150,000 |
Estimated Fair Value | $ 124,306 | 123,656 |
Debt Instrument, Interest Rate, Stated Percentage | 3.20% | |
4.49% Senior notes due 2032 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 200,000 | 200,000 |
Estimated Fair Value | $ 183,150 | 183,007 |
Debt Instrument, Interest Rate, Stated Percentage | 4.49% | |
4.64% Senior notes due 2034 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Carrying Value | $ 100,000 | 100,000 |
Estimated Fair Value | $ 90,700 | 90,341 |
Debt Instrument, Interest Rate, Stated Percentage | 4.64% | |
Long-term Debt, Gross | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Estimated Fair Value | $ 1,079,782 | $ 1,152,828 |
PENSION PLANS (Detail)
PENSION PLANS (Detail) - Pension Plans Defined Benefit [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 4,137 | $ 5,970 | $ 8,264 | $ 12,033 |
Interest cost | 8,811 | 5,418 | 17,601 | 10,706 |
Expected return on plan assets | (15,858) | (13,858) | (31,678) | (27,715) |
Amortization of prior service cost | (33) | (87) | (66) | (173) |
Amortization of unrecognized actuarial loss | 76 | 3,845 | 153 | 7,851 |
Gain (Loss) Due to Settlement | 0 | 0 | 0 | (1,842) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total | $ (2,867) | $ 1,288 | $ (5,726) | $ 4,544 |
PENSION PLANS (Narrative) (Deta
PENSION PLANS (Narrative) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Defined Contribution Plan, Employer Contribution, Percentage, Maximum | 7% | |||
Defined Contribution Plan, Cost | $ 6.1 | $ 4.6 | $ 12.2 | $ 10.3 |
EARNINGS PER SHARE (Detail)
EARNINGS PER SHARE (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share Reconciliation [Abstract] | ||||
Basic weighted-average shares outstanding (shares) | 38,329 | 38,429 | 38,309 | 38,438 |
Incremental Common Shares Attributable to Dilutive Effect of Share-based Payment Arrangements | 226 | 225 | 219 | 219 |
Diluted weighted-average shares outstanding (shares) | 38,555 | 38,654 | 38,528 | 38,657 |
EARNINGS PER SHARE EARNINGS PER
EARNINGS PER SHARE EARNINGS PER SHARE (Anti-dilutive) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 20,000 | 37,000 | 22,000 | 31,000 |
SEGMENT INFORMATION (Detail)
SEGMENT INFORMATION (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||||
Net sales | $ 704,396 | $ 609,357 | $ 1,335,256 | $ 1,168,818 | |
Operating income (expense) | 112,775 | 98,105 | 191,390 | 158,615 | |
Identifiable assets | 4,441,098 | 4,441,098 | $ 4,449,602 | ||
Aerospace & Industrial | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 226,766 | 209,311 | 430,352 | 401,161 | |
Operating income (expense) | 35,665 | 32,464 | 62,210 | 57,317 | |
Identifiable assets | 1,064,442 | 1,064,442 | 1,041,562 | ||
Defense Electronics | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 198,407 | 150,404 | 361,477 | 294,342 | |
Operating income (expense) | 43,180 | 24,460 | 66,548 | 47,750 | |
Identifiable assets | 1,567,053 | 1,567,053 | 1,546,331 | ||
Naval & Power | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | 280,731 | 251,313 | 547,545 | 476,628 | |
Operating income (expense) | 46,782 | 50,001 | 84,719 | 77,289 | |
Identifiable assets | 1,517,090 | 1,517,090 | 1,488,867 | ||
Corporate, Non-Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating income (expense) | (12,852) | (8,820) | (22,087) | (23,741) | |
Identifiable assets | 292,513 | 292,513 | $ 372,842 | ||
Intersegment Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net sales | $ (1,508) | $ (1,671) | $ (4,118) | $ (3,313) |
SEGMENT INFORMATION (Reconcilia
SEGMENT INFORMATION (Reconciliation) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Segment Reporting [Abstract] | ||||
Total operating income | $ 112,775 | $ 98,105 | $ 191,390 | $ 158,615 |
Interest expense | (14,992) | (9,788) | (27,936) | (19,318) |
Other income, net | 7,954 | 4,555 | 15,721 | 7,552 |
Earnings before income taxes | $ 105,737 | $ 92,872 | $ 179,175 | $ 146,849 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | $ (258,916) | $ (190,465) | $ (190,465) | ||
Other comprehensive income (loss) before reclassifications | 33,479 | (84,688) | |||
Amounts reclassified from accumulated other comprehensive loss | 62 | 16,237 | |||
Other comprehensive income (loss), net of tax | $ 19,067 | $ (36,348) | 33,541 | (37,407) | (68,451) |
Ending balance | (225,375) | (225,375) | (258,916) | ||
Foreign Currency Translation Adjustments, Net [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | (160,807) | (99,566) | (99,566) | ||
Other comprehensive income (loss) before reclassifications | 33,964 | (61,241) | |||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | |||
Other comprehensive income (loss), net of tax | 33,964 | (61,241) | |||
Ending balance | (126,843) | (126,843) | (160,807) | ||
Total Pension and Postretirement Adjustments, Net [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||||
Beginning balance | (98,109) | $ (90,899) | (90,899) | ||
Other comprehensive income (loss) before reclassifications | (485) | (23,447) | |||
Amounts reclassified from accumulated other comprehensive loss | 62 | 16,237 | |||
Other comprehensive income (loss), net of tax | (423) | (7,210) | |||
Ending balance | $ (98,532) | $ (98,532) | $ (98,109) |
ACCUMULATED OTHER COMPREHENSI_4
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclass) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Earnings before income taxes | $ 105,737 | $ 92,872 | $ 179,175 | $ 146,849 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Total Pension and Postretirement Adjustments, Net [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Amortization of prior service costs | 66 | |||
Amortization of actuarial losses | (153) | |||
Earnings before income taxes | (87) | |||
Provision for income taxes | 25 | |||
Net earnings | $ (62) |
CONTINGENCIES AND COMMITMENTS (
CONTINGENCIES AND COMMITMENTS (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Standby Letters Of Credit [Member] | |||
Loss Contingencies [Line Items] | |||
Letters of credit, outstanding | $ 21 | $ 17 | |
FinancialStandbyLetterOfCreditMember | |||
Loss Contingencies [Line Items] | |||
Letters of credit, outstanding | 14 | $ 3 | |
Surety Bond [Member] | |||
Loss Contingencies [Line Items] | |||
Surety Bond Outstanding | 35 | ||
AP1000 | |||
Loss Contingencies [Line Items] | |||
Litigation Settlement, Amount Awarded to Other Party | $ 10 | $ 15 |