Exhibit 13
[LOGO]
Curtiss-Wright Corporation
1200 Wall Street West
Lyndhurst, New Jersey 07071
solutions
annual report
2000
engineered driven growing
a tradition of engineering
excellence
Curtiss-Wright Corporation
CW
Listed
NYSE
THE NEW YORK STOCK EXCHANGE
contents
02 Challenges and Solutions
14 At a Glance
16 Letter to Shareholders
19 Quarterly Results of Operations
19 Consolidated Selected
Financial Data
19 Forward-Looking Statements
20 Management's Discussion and
Analysis of Financial Condition
and Results of Operations
24 Report of the Corporation
24 Report of Independent Accountants
25 Consolidated Financial Statements
29 Notes to Consolidated Financial
Statements
41 Corporate Directory and Information
company overview
Curtiss-Wright Corporation is a diversified global provider of highly engineered
products and services to the Motion Control, Flow Control, and Metal Treatment
industries. The firm employs 2,286 people. More information on Curtiss-Wright
can be found on the Internet at www.curtisswright.com
net sales ($000s)
sales per employee ($)
Compound annual growth rate for Sales was 18%.
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operating income ($000s)
Compound annual growth rate
for Normalized Operating Income
was 33%.
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net earnings ($000s)
Compound annual growth rate
for Normalized Net Earnings
was 24%.
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financial highlights
(Dollars in thousands, except per share data; unaudited) 2000
1999 1998
================================================================================================================================
Performance
Net Sales $ 329,575 $
293,263 $ 249,413
Earnings before interest, taxes, depreciation, amortization and pension income $ 74,247 $
70,888 $ 52,600
Net earnings $ 41,074 $
39,045 $ 29,053
Normalized net earnings(1) $ 37,910 $
34,042 $ 27,817
Diluted earnings per common share $ 4.03 $
3.82 $ 2.82
Normalized diluted earnings per common share $ 3.72 $
3.33 $ 2.70
Return on sales 12.5%
13.3% 11.6%
Return on average assets 10.3%
10.6% 9.1%
Return on average stockholders' equity 15.0%
16.0% 13.4%
New orders $ 299,403 $
295,709 $ 232,217
Backlog at year-end $ 182,648 $
212,820 $ 198,297
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Year-End Financial Position
Working capital $ 149,779 $
124,438 $ 130,763
Current ratio 3.9 to 1 3.2 to
1 2.9 to 1
Total assets $ 409,416 $
387,126 $ 352,740
Stockholders' equity $ 290,224 $
258,355 $ 229,593
Stockholders' equity per common share $ 28.97 $
25.73 $ 22.53
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Other Year-End Data
Depreciation and amortization $ 14,346 $
12,864 $ 9.661
Capital expenditures $ 9,506 $
19,883 $ 10.642
Shares of common stock outstanding 10,017,280
10,040,250 10,190,790
Number of stockholders 3,602
3,854 3,926
Number of employees 2,286
2,267 2,052
================================================================================================================================
Dividends per Common Share $ 0.52 $
0.52 $ 0.52
================================================================================================================================
(1) Earnings have been adjusted to exclude the effects of environmental
insurance settlements, postretirement benefits, postemployment costs,
recapitalization costs, a gain on sale of a nonoperating facility and
consolidation costs.
annual report
2000
The cornerstone of Curtiss-Wright's past successes and future growth is our
ability to provide engineered solutions to our customers' problems. Many of the
products and services we provide require a close working relationship with our
customers in order to satisfy their demanding performance parameters. Our
engineering capabilities are an important part of the package that we bring to
the marketplace. Whether it is actuation systems for wing flap systems, severe
duty nuclear valves, or our metallurgical expertise in shot peening and heat
treating, we work alongside our customers to solve their engineering challenges
and ultimately improve the performance of the products or services they provide.
Curtiss-Wright Corporation and Subsidiaries 1
challenge
The F-22 is the next generation tactical fighter for the United States Air
Force. The aircraft has a stealth design to minimize the chance of detection by
radar. In order to maintain its invisibility, all weapons are carried within the
aircraft rather than on its wings.
The challenge was to develop a stealth system for opening the bomb bay doors,
each of which is about the size of a garage door, to allow the weapons to be
deployed without significantly changing the aircraft's radar signature. Door
opening and closing had to be accomplished in a matter of seconds while
traveling at extremely high speeds and enduring extreme aerodynamic forces.
2 Curtiss-Wright Corporation and Subsidiaries
solution
no. 186600
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FIGURE 1.1 WEAPONS BAY DOOR POWER DRIVE UNIT
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Curtiss-Wright designed, tested and will manufacture the actuation system, which
will operate under the most demanding conditions. Not only will it be used on
the F-22, but it will also provide an experience base for the development of
similar systems for future military aircraft. It has already been adapted to a
prototype for a new unmanned attack aircraft.
[GRAPHIC OMITTED]
FIGURE 1.2
Curtiss-Wright components and systems help make the F-22 the world's most
advanced tactical fighter, which will allow the United States to maintain its
air superiority in the decades ahead.
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challenge
In the past, components used in aircraft and automotive applications experienced
metal fatigue failures due to the extreme loads under which they operated. In
response to this challenge, Curtiss-Wright developed an application of our
shot-peening process that improved the components' resistance to metal fatigue
and stress corrosion cracking, thereby extending their life and reliability.
However, our customers had further requirements for improving the performance of
their products. In addition to enhancing the mechanical properties of these
components, there was the need to reduce the weight of the end products while
maintaining durability.
6 Curtiss-Wright Corporation and Subsidiaries
solution
no. AG7290
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FIGURE 2.1 LASER PEENING
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Curtiss-Wright is working with Lawrence Livermore National Laboratory in
developing an advanced metal surface treatment process utilizing laser
technology. The result is a deeper surface compression that significantly
improves resistance to metal fatigue and stress corrosion cracking beyond what
is currently provided for by other surface treatment processes.
FIGURE 2.2
The potential benefits of developing a cost effective laser peening process, in
addition to jet engines and other aerospace applications, would be life
extension of automobile and truck transmissions and the weight reduction of
vehicle frames, resulting in lower maintenance and fuel costs for millions of
drivers.
[GRAPHIC OMITTED]
challenge
The processing industry has established programs to monitor and reduce the
release of fugitive emissions into the air. One source of this leakage is
through the stems of control valves used throughout today's processing plants.
The packing in the stems becomes worn over time, requiring the repair or
replacement of the valve.
The protection of our environment requires not only additional costs associated
with the repair and replacement of valves but also additional expenses for
monitoring all the valves in the plant to measure emission leakage rates and
determine when corrective action has to be taken.
10 Curtiss-Wright Corporation and Subsidiaries
solution
no. 95169
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FIGURE 3.1 ZERO EMISSION VALVE (ZEV) -- MODELS 100 & 120
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Curtiss-Wright has produced valves for applications in nuclear submarines,
aircraft carriers and power generation plants where, by necessity, they must be
truly leakless in the most severe conditions. We have applied this leakless
technology to developing a high-performance control valve that totally
eliminates hazardous valve-stem emissions in processing plants.
[GRAPHIC OMITTED]
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FIGURE 3.2
Thanks to Curtiss-Wright, processing plants now have a product available,
certified by the California EPA, that prevents the release of hazardous
emissions into the environment and reduces the cost of monitoring, repairing or
replacing non-compliant valves.
at a glance
The Wright Brothers and Glenn Curtiss were pioneers of aviation. Their ability
to develop the technology driving early advancements in flight is a tradition
that continues at Curtiss-Wright. Today, the Company operates across three
business segments of approximately equal size, giving us diversification and
balance. We provide highly engineered products and services to a number of
global markets and pride ourselves in the strong customer relationships that
have been developed over the years.
Our Motion Control segment designs, engineers and manufactures actuation
components and systems used for leading and trailing edge wing flaps on
commercial and military aircraft, systems for opening and closing cargo doors on
commercial aircraft and weapons bay doors on fighter aircraft, suspension
systems and turret stabilizing and aiming systems for armored vehicles, and
leveling systems for railroad car applications. Another important part of this
business segment is providing maintenance, repair and overhaul services for
commercial and military aerospace components.
Our Metal Treatment segment is built around our leadership in providing
shot-peening services through a network of thirty-nine facilities located
throughout North America and Europe. Shot peening is a process applied to metal
components that increases fatigue strength and improves resistance to stress
corrosion, thereby increasing the life of the components. In addition to shot
peening, we provide shot-peen forming services, which actually shape wing skins
to create the aerodynamic curvature in the wing. We also provide a wide
assortment of other metal treatment services, such as heat-treating, to an
active base of over 5,000 customers.
The Company's involvement in the Flow Control segment began when the U.S. Navy
came to us to design a valve for use on nuclear submarines under development.
Since that time we have provided critical valves on every U.S. nuclear submarine
and aircraft carrier that has gone to sea and continue to work closely with the
Navy on the development of valves for new applications. We have expanded upon
this base to be a supplier of flow control products and related services to the
nuclear power generation and petrochemical industries and other processing
industries.
14 Curtiss-Wright Corporation and Subsidiaries
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revenues ($ in thousands) products and services major markets
===============================================================================================================
motion control Control and Actuation Components Aerospace Manufacturing
& Systems Commercial Airlines
[MOUNTAIN GRAPH OMITTED] Aerospace Overhaul Services Airfreight Haulers
Hydropneumatic Suspension Systems Military Air Forces
Electromechanical Drives & Systems Military Vehicle Manufacturing
Electrohydraulic Drives & Systems Railway Car Manufacturing
Rescue Tools Diesel Engine Manufacturing
Rescue Tool Industry
- ---------------------------------------------------------------------------------------------------------------
metal treatment Among the approximately 50 services Valve Reed Manufacturing
we provide are: Aerospace Manufacturing
[MOUNTAIN GRAPH OMITTED] Automotive Manufacturing
Aluminum/Nonferrous Treating Metalworking Industries
Annealing/Stress Relieving Oil & Gas Drilling/Exploration
Austempering/Brazing Power Generation
Blast Cleaning Jet Engine Manufacturing
Carbonitriding/Nitriding Agricultural Equipment
Carbon Testroration/Carburizing Transportation
Cryogenic Treatments Construction & Mining
Deburring
Edge, Vibratory & Superfinishing
Engineering & Field Services
Fabrication of Machinery, Tooling,
Parts & Supplies
Fatigue & Physical Testing
Flame, Induction &
Precipitation Hardening
Laser Peening
Marquenching/Normalizing
Nondestructive Testing
Painting/Plating
Shot-Peening
Shot-Peen Forming
Straightening
Texturizing
Vacuum Treatments
- ---------------------------------------------------------------------------------------------------------------
flow control Military & Commercial Nuclear/ U.S. Navy Propulsion Systems
Non-nuclear Valves (globe, gate, U.S. Navy Shipbuilding
[MOUNTAIN GRAPH OMITTED] control, safety, solenoid and relief) Nuclear Power Plants
Fluid Power Products & Systems Petrochemical/Chemical Industry
Valve Overhaul & Repair Entertainment Industry
Engineering, Inspection & Testing Services Petroleum Production/Refining
Air-Driven Hydraulic Pumps & Gas Boosters Pharmaceutical Industry
Industrial Gases Industry
Automotive/Truck Industry
- ---------------------------------------------------------------------------------------------------------------
to our shareholders
I am pleased to report that Curtiss-Wright achieved another year of strong
profitability and cash flow. The year 2000 represents the fourth consecutive
year that we have grown normalized operating income at double-digit rates and
our objective is to continue this growth rate into the foreseeable future.
In spite of downturns in a few of our markets, we increased sales by 12% from
1999 and our normalized operating income increased by 13%. These achievements
are a result of the balance and diversification that we have within
Curtiss-Wright and our three business segments as well as the corporate wide
cost reduction/profitability improvement programs that we have put in place.
Where we were once a company dependent on the OEM aerospace market and exposed
to the cyclical nature of that industry, we have taken actions to broaden
ourselves within the core businesses we operate. We have seen the benefits of
this diversification in 2000 and will continue to build upon the basic strengths
of the organization to further broaden ourselves and to generate balanced growth
in the future.
Our long-term performance placed us on Forbes magazine's list of America's 200
Best Small Companies for the second year in a row.
Curtiss-Wright has a long history, with roots going back to the Wright Brothers'
first flight in 1903. Today we continue on the path they began as a company
centered upon engineering excellence. Our present successes have been a direct
result of our expertise in developing highly engineered products and services to
serve a variety of specific markets. Successful application of our engineering
expertise is the core quality that unites our business units and allows us to
position ourselves within niche segments serving the Motion Control, Metal
Treatment and Flow Control markets where we operate and earn attractive profit
margins. We will continue to use this asset to drive the growth we seek and to
create value. We at Curtiss-Wright expect to expand our technical know-how into
areas related to our existing products and services and, as a result, to achieve
even higher profit and sales growth. Our expertise in metallurgical and
application engineering will provide the basis for growing into other
metal-treating processes as well as sustaining our continued growth in shot
peening and heat treating. Our capabilities in motion control mechanisms and
systems are expected to strengthen our existing position in the aerospace
industry and enable us to enter new markets. We have also expanded our
engineered valve capability, which will provide the groundwork for further
penetration of market segments related to highly engineered valves, actuators
and controls for complete integrated systems.
Growth Opportunities
Our Company has established strong positions in the markets that we serve and
has an excellent reputation among our customer base. We will take advantage of
our position to expand into related product lines and markets. This will take
place through organic development of programs and through strategic acquisitions
that expand our current operations. Our planned growth can and will take on
several forms.
We have opportunities to apply our technology and engineering capabilities to
new areas and product lines. In some markets, such as Flow Control, where we
have high-end technology, we see market needs moving up to where we are. This is
evident in the market movement to smart valves and systems that manage flow
control processes by collecting operational data, analyzing it and providing new
instruction feedback to the system components. We are positioning ourselves in
this area through internal capabilities and through partnering arrangements to
take advantage of the movement toward these more sophisticated systems.
16 Curtiss-Wright Corporation and Subsidiaries
[PHOTO]
Martin R. Benante
Chairman and Chief Executive Officer
sales by business segment
[The following information was represented as a pie chart in the original text.]
Flow Control 30%
Metal Treatment 32%
Motion Control 38%
sales by industry
[The following information was represented as a pie chart in the original text.]
Agriculture 1%
Automotive 5%
Commercial Aerospace 40%
Construction & Mining 2%
Marine 6%
Military Aerospace 7%
Non-Aviation Military 2%
Oil & Petroleum 7%
Other 12%
Power Generation 10%
Rescue 1%
Transportation 7%
"We have seen the benefits of diversification in 2000 and will continue to build
upon the basic strengths of the organization to further broaden ourselves and to
generate balanced growth in the future."
We have expanded our international presence, and we see this as an area that
continues to offer additional growth opportunities. An example of this is in our
Metal Treatment business segment. Of our thirty-nine facilities, nine are
outside of North America. We are aggressively looking for additional markets
where new facilities can be established and we anticipate opening several new
shot-peening facilities over the next five years in Europe, Asia and Latin
America. We are also continuing to improve our Flow Control product distribution
network to increase our penetration into overseas markets.
A growing trend affecting a few of our businesses is the increasing importance
of aftermarket product and services. In the aerospace and flow control markets,
we continue to expand our capabilities not only for the sale of spare parts for
products we manufacture but also for the repair and overhaul of products
manufactured by other companies. We have grown our aerospace overhaul and repair
activities in our Motion Control business segment, which were virtually
nonexistent eight years ago, to become a global market player. Today we operate
from three certified repair stations and produce a sales level nearly equal to
the sales of the aerospace OEM products we manufacture. We plan to continue this
growth by providing additional services such as aviation inventory logistics and
piece-part overhaul and repair services.
In our Metal Treatment business segment we will be expanding our capabilities to
broaden the products and services we can deliver to our customer base. We will
be increasing the number of heat-treating facilities from our current number of
seven to establish a network similar to that which we have built in our
shot-peening business. Developing a network of facilities has provided us with a
competitive advantage, and we will seek to duplicate this in other services we
provide. We are also exploring other services such as plating, which will allow
us to provide a complete metal-treatment package from full-service locations,
thereby reducing logistics problems and turnaround times for our customers.
Customer Relations
Strong customer relationships continue to be one of our greatest advantages.
Each relationship is built upon our ability to provide superior technical
products with a high level of service. We have earned an excellent reputation in
all the markets we serve.
One prime example of this is our reputation in Metal Treatment. We are
recognized as the technological leader in the field of shot peening. This
business has been built upon our ability to solve our customers' stress
problems. We cost-effectively increase the resistance of components to stress
corrosion, thereby reducing failures in our customers' products and improving
performance. By helping our customers improve their products we increase the
satisfaction of their customers. The fact that we have an active base of over
5,000 customers illustrates the importance of the Metal Treatment services we
provide.
Our excellent customer relationships extend through our other business segments
as well. Motion Control has gained a strong reputation as a "can-do" supplier.
Boeing Military Airplane Co. was aware of Curtiss-Wright's unique capabilities
in developing complex actuation systems and as a result, we were asked to
participate in the development of their next generation aircraft, the Boeing
Unmanned Combat Air Vehicle or UCAV. It will be a
Curtiss-Wright Corporation and Subsidiaries 17
stealth aircraft that carries all of its armament internally, similar to the
Lockheed/Boeing F-22 manned fighter. Based upon our success in developing the
F-22 Weapons Bay Door actuation system, Boeing contracted with us for the
development of a similar system for the UCAV. We were able to leverage our
experience with the F-22 program to meet a rapid development schedule and the
successful rollout of the first UCAV in November 2000.
In our Flow Control business segment we have supplied product to the U.S. Navy
for every nuclear submarine and aircraft carrier that has gone to sea.
Curtiss-Wright is now considered the premier supplier of valves for U.S. Navy
nuclear applications. We are now using this long-standing relationship and our
renowned engineering and manufacturing capabilities to provide product for other
non-nuclear shipboard and land-based applications. The Navy is currently
evaluating our titanium valves, which have been specially engineered to provide
greater resistance to seawater corrosion. The Navy is also testing our leakless
valves for use in aviation fuel transport systems aboard its aircraft carriers.
Positioning the Organization
In 2000 we have initiated some key programs to position ourselves for future
growth and continued improvements in the performance of our operations. We
strive to be the most innovative, cost-effective and profitable producer in each
of our markets. We work consistently to improve our Company's operations,
increase efficiency and reduce costs, thereby maximizing operating margins and
cash flow. To ensure that we maintain the quality and depth of our management
ranks to support our growth expectations and our acquisition program, we will be
making new, significant investments in our employee resources.
We have evaluated the performance levels of each of our operating units against
industry standards. While all three of our business segments rank among the
industry leaders in areas of operating performance, control of working capital
requirements and return on investment, we continue to implement programs to meet
and exceed those industry standards. Activities to improve profitability and
investment returns are as important as those geared toward the future growth of
the organization.
Broadening of Shareholder Base
In November of 2000 we announced plans which will allow Unitrin, Inc., our
largest shareholder holding 44% of our stock, to distribute their shares to
their approximately 8,000 shareholders in a tax-free manner. Unitrin has held
this interest since 1976. While we appreciate the long relationship we have had
with Unitrin we believe the proposed transaction will result in additional
benefits to all of our shareholders. It will significantly increase the
liquidity and public float of Curtiss-Wright's capital stock and this, with a
broader shareholder base, is expected to attract additional analyst coverage of
Curtiss-Wright. Additional analyst coverage will enhance the market's awareness
of Curtiss-Wright and stimulate demand from new investors.
We believe these improvements will enhance our ability to grow our Company and
over the long-term benefit the valuation of Curtiss-Wright's common stock in the
marketplace.
Outlook
Much of our business is driven by the general growth of the basic industries we
serve, such as aerospace and defense, automotive, oil and gas exploration,
petrochemical and other processing industries, agriculture, transportation and
construction. While some of these markets may experience a downturn in 2001, we
feel that our diversification will create offsets in other markets, resulting in
overall higher sales and improved profitability.
A portion of our aerospace business is related to the build rate of commercial
airliners, which is cyclical and experienced a decline in 2000 from the level of
1999. Airbus and Boeing, both customers of Curtiss-Wright, are projecting
increases in their production schedules in 2001. The Company also expects to be
supplying several systems for the F-22 Raptor, the new U.S. Air Force air
superiority fighter. Advancing this program into full production would be an
important addition for our Motion Control business segment.
Our strong balance sheet will continue to be a tool generating growth for the
Company independent of the general economy. Our three business segments provide
us with multiple opportunities not only for acquisitions but also for investment
in programs for organic growth. In addition, we look to expand our geographical
presence and to build upon our engineering capabilities and the high regard we
enjoy from our customers to improve our competitive position in our existing
markets.
We can achieve our objectives only through the individual successes of our
employees. Curtiss-Wright's employees are talented and dedicated and have worked
together as teammates to achieve these common objectives. We will continue to
foster a work environment that provides the resources necessary for their
continued success. Their efforts have produced the growth that the
Curtiss-Wright organization has delivered over the last five years. As
shareholders, you may be assured that all of us at Curtiss-Wright will continue
working to deliver the very best results we can for you in the years ahead.
/s/ Martin R. Benante
Martin R. Benante
Chairman and Chief Executive Officer
18 Curtiss-Wright Corporation and Subsidiaries
quarterly results of operations (unaudited)
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(In thousands, except per share data) First Second Third Fourth
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2000
Net Sales $ 82,237 $ 83,050 $ 81,878 $ 82,410
Gross profit 28,929 30,471 30,767 30,803
Net earnings 9,229 10,644 11,079 10,122
Earnings per share:
Basic earnings per common share $ .92 $ 1.06 $ 1.11 $ 1.01
Diluted earnings per common share $ .91 $ 1.05 $ 1.09 $ .99
Dividends per common share $ .13 $ .13 $ .13 $ .13
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1999
Net Sales $ 70,350 $ 70,195 $ 69,009 $ 83,709
Gross profit 25,018 24,680 23,881 28,832
Net earnings 7,982 8,279 13,985 8,799
Earnings per share:
Basic earnings per common share $ .79 $ .82 $ 1.38 $ .87
Diluted earnings per common share $ .78 $ .79 $ 1.38 $ .87
Dividends per common share $ .13 $ .13 $ .13 $ .13
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consolidated selected financial data
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(In thousands, except per share data) 2000 1999 1998 1997 1996
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Net Sales $329,575 $293,263 $249,413 $219,395 $170,536
Net earnings 41,074 39,045 29,053 27,885 16,109
Total assets 409,416 387,126 352,740 284,708 267,164
Long-term debt 24,730 34,171 20,162 10,347 10,347
Basic earnings per common share $ 4.10 $ 3.86 $ 2.85 $ 2.74 $ 1.59
Diluted earnings per common share $ 4.03 $ 3.82 $ 2.82 $ 2.71 $ 1.58
Cash dividends per common share $ .52 $ .52 $ .52 $ .50 $ .50
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See notes to consolidated financial statements for
additional financial information.
forward-looking statements
This Annual Report contains not only historical information but also
forward-looking statements regarding expectations for future company
performance. Forward-looking statements involve risk and uncertainty. Please
refer to the Company's 2000 Annual Report on Form 10-K for a discussion relating
to forward-looking statements contained in this Annual Report and factors that
could cause future results to differ from current expectations.
Curtiss-Wright Corporation and Subsidiaries 19
management's discussion and analysis of financial condition and results of
operations
Results of Operations
Curtiss-Wright Corporation posted consolidated net sales of $329.6 million and
net earnings of $41.1 million, or $4.03 per diluted share, for the year ended
December 31, 2000. Sales for the current year increased 12% over 1999 sales of
$293.3 million, and 32% over 1998 sales of $249.4 million. Net earnings for 2000
improved 5% over prior year net earnings of $39.0 million, or $3.82 per diluted
share and 41% over net earnings of 1998, which totaled $29.1 million, or $2.82
per diluted share. Net earnings for all three years include several nonrecurring
items, which impact a year-to-year comparison. The following table depicts the
Corporation's "normalized" results, which should present a clearer picture of
its after-tax performance:
Normalized Net Earnings:
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(In thousands, except per share data) 2000 1999 1998
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Net earnings $ 41,074 $ 39,045 $ 29,053
Environmental insurance
settlements, net (1,894) (7,354) (1,754)
Postretirement benefits and
postemployment costs, net (1,336) -- --
Facility consolidation costs 50 2,351 518
Gain on sale of nonoperating
property (894) -- --
Recapitalization costs 910 -- --
Normalized net earnings $ 37,910 $ 34,042 $ 27,817
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Normalized net earnings
per diluted share $ 3.72 $ 3.33 $ 2.70
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Environmental Insurance Settlements
The Corporation had previously filed lawsuits against several insurance carriers
seeking recovery for environmental costs and reached settlements with the
remaining carriers in 2000, after having settled with two carriers in 1999 and
one in 1998. The amounts reported above are recoveries, net of associated
expenses and additional expenses related to ongoing environmental liabilities of
the Corporation. Further information on environmental costs is contained in Note
11 to the Consolidated Financial Statements.
Postretirement Benefits and Postemployment Costs
In 2000, the Corporation recognized a reduction in general and administrative
expenses related to the curtailment of postretirement benefits associated with
the closing of the Fairfield, New Jersey facility, partially offset by the
recognition of other postemployment costs. Further information on retirement
plans is contained in Note 12 to the Consolidated Financial Statements.
Facility Consolidation Costs
Beginning in 1998, the Corporation incurred costs associated with the
consolidation of manufacturing operations within the Motion Control segment.
These costs include costs relative to the shutdown of the Fairfield, New Jersey
facility, the consolidation of manufacturing operations into an expanded Shelby,
North Carolina facility, and the move of certain overhaul and repair services to
a new location in Gastonia, North Carolina.
Sale of Nonoperating Property
In September 2000, the Corporation recorded a net after-tax gain of $0.9 million
on the sale of a nonoperating Metal Treatment facility located in Chester,
England.
Recapitalization Costs
Costs During 2000, the Corporation incurred costs related to a proposed
transaction between Curtiss-Wright and Unitrin, the holder of approximately 44%
of its outstanding common stock. Further information on this transaction is
contained later in this section--see "Recapitalization."
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Excluding these nonrecurring items, "normalized" net earnings for 2000 of $37.9
million, or $3.72 per diluted share, were 11% higher than "normalized" net
earnings of $34.0 million, or $3.33 per diluted share, for 1999 and 36% higher
than "normalized" net earnings of $27.8 million, or $2.70 per diluted share, for
1998. Excluding the net recoveries from insurance settlements and facility
consolidation costs, "normalized" operating income from the Corporation's three
operating segments totaled $49.2 million for 2000, an improvement of 17% and
42%, respectively, when compared with "normalized" operating income of $42.1
million for 1999 and $34.6 million for 1998. Adversely impacting financial
results for 2000 was a significant decline in foreign exchange rates. Comparing
this year's results to those of the prior year, weak European currencies
negatively impacted sales by $5.2 million and operating income by $1.7 million.
The improvement in financial results comparing 2000 to 1999 largely reflects the
full year contributions from the acquisitions of Farris Engineering, Sprague
Products and Metallurgical Processing Inc., made by the Corporation in 1999.
Improvements in 1999 from 1998 reflect a full year of contributions from the
businesses acquired in 1998. Since April 1998, the Corporation has acquired
seven new businesses: EF Quality Heat Treating Company, Alpha Heat Treaters,
Enertech, Drive Technology, Metallurgical Processing, Farris Engineering and
Sprague Products.
New orders received in 2000 totaled $299.4 million, only slightly above 1999
total new orders of $295.7 million but 29% higher than new orders received in
1998. Backlog at December 31, 2000 stands at $182.6 million compared with $212.8
million at December 31, 1999 and $198.3 million at December 31, 1998. It should
be noted that metal treatment services, repair and overhaul services and
after-market sales, which represent more than 50% of the Corporation's total
sales for 2000, are sold with very modest lead times. Accordingly, the backlog
for these businesses is less of an indication of future sales than the backlog
of the majority of the Motion Control and Flow Control segments, in which a
significant portion of sales are derived from long-term contracts.
Segment Performance
Motion Control
Sales for the Corporation's Motion Control segment totaled $126.8 million in
2000, 2% above sales of $124.2 million in 1999. Sales of aerospace overhaul and
repair services for 2000 improved over 1999 but were largely offset by lower
Boeing commercial aircraft production. Additional revenue was provided by a
Boeing 757 retrofit program, which was largely offset by declines in other
Boeing programs. Sales of Motion Control products for 2000 also reflect
continued growth in the ground defense aiming and stabilization markets from its
Drive Technology business in Europe as compared
20 Curtiss-Wright Corporation and Subsidiaries
to the prior year. Operating income for the Motion Control segment showed
substantial improvements in 2000. Included in 1999 results were costs related to
the consolidation of the Fairfield, NJ operation into Motion Control's low-cost,
state-of-the-art facilities in North Carolina. Expenses related to the
consolidation activities totaled approximately $3.8 million in 1999. In 2000,
the Corporation began to realize cost savings relative to the consolidation. The
cost savings were partially offset by lower operating income in the overhaul and
repair business due to lower gross margins caused by softening in many of their
served markets.
The Corporation's Motion Control segment sales for 1999 were 18% above the sales
reported for 1998 of $105.4 million. The higher sales largely reflected the
acquisition of Drive Technology on December 31, 1998. Sales of commercial
aircraft actuation products in 1999 also improved over the prior year,
reflecting a contract extension with Boeing signed in the first quarter of 1999.
Sales for the aircraft component overhaul and repair business improved slightly
in 1999, as compared to 1998, but sales of military aircraft actuation products
declined during the same period. Sales of military actuation products for 1998
benefited from the completion of "safety of flight" testing on F-22 components
and final sales for a previously received F-16 shaft retrofit contract.
Operating income for the Motion Control segment was impacted in 1999 by the
aforementioned consolidation costs and in 1998 by several cost, efficiency and
inventory valuation issues. In the aggregate, accounting adjustments, cost
overruns on military development contracts and costs related to the
consolidation of manufacturing operations resulted in a charge to net earnings
of $3.9 million, or $0.38 per share, in 1998.
Metal Treatment
Sales for the Corporation's Metal Treatment segment totaled $105.3 million for
2000, slightly above sales of $104.1 million for 1999. Sales improvements in
2000 from the prior year reflect an acquisition that occurred in mid-1999, and
increased sales volume in the commercial European aerospace market, which were
largely offset by the negative effect of foreign currency translation. Weak
European currencies adversely impacted sales in 2000 (from 1999) by $3.5
million. Operating income for the Metal Treatment segment showed a slight
decrease when comparing 2000 to 1999. For 2000, improvements in heat-treating
operations were largely offset by lower income at both European and North
American shot-peening operations. As with sales, income from European
shot-peening operations were adversely impacted by foreign currency translation.
Foreign currency translation reduced operating income in 2000 by $1.6 million.
The Corporation's Metal Treatment segment reported sales for 1999 were slightly
lower than the record sales for metal treatment services in 1998 of $106.0
million. Sales for 1999 were depressed by softness in several of its primary
markets, which offset the benefits from acquisitions and facility expansions
made in 1998. Operating income for 1999 was significantly below that of 1998,
due to lower margins and increased operating expenses, including costs for
facility expansions in both North America and Europe. During 1999 three of this
segment's operations relocated into larger facilities and incurred higher
operating costs and temporary start-up costs as a result.
Flow Control
The Corporation's Flow Control segment posted sales of $97.5 million for 2000,
compared with sales of $65.0 for 1999. Operating income for 2000 was also
significantly higher than 1999. The significant improvements in both sales and
operating income were largely the result of the acquisition of the Farris and
Sprague businesses, which occurred in August of 1999. Sales and earnings from
the traditional product lines in the Flow Control segment exceeded the levels
achieved in 1999. Sales of marine product lines to the U.S. Navy continued to
perform well, as did sales from retrofit and service programs for domestic
nuclear utilities, and the sale of valves for new, foreign nuclear power plant
construction programs. Industrial valve sales continued to perform well
notwithstanding a general softness in two primary markets--petrochemical and
chemical process industries. In the third quarter of 2000, the Flow Control
segment sold a small hydraulic products distribution business, consisting of net
inventory and other assets, for approximately its book value.
The Corporation's Flow Control segment reported sales for 1999 which were 71%
above sales for 1998 of $38 million. The improved sales reflected contributions
from the acquisitions of Enertech in July 1998 and the Farris and Sprague
business units in August 1999. Sales in 1999 also reflected additional U.S. Navy
valve business, while 1998 sales reflected higher commercial valve product sales
for a foreign nuclear power plant. Operating income for 1999 benefited from
acquisitions but higher administrative expenses largely offset those
improvements. Operating income for 1998 had also benefited from improved cost
performance on valve remakes and upgrade programs.
Corporate and Other Expenses
Operating income for the Corporation includes the recognition of environmental
remediation costs, related administrative expenses, costs for legal services to
pursue claims against related parties and related recoveries of such claims.
Details of environmental expenses and related recoveries are discussed further
in Note 11 to the Consolidated Financial Statements. Also included in nonsegment
operating income for 2000 is a $2.9 million benefit resulting from the
curtailment of postretirement medical coverage for former employees of the
Corporation's Fairfield, NJ plant due to its closure in December 1999, offset
partially by postemployment expenses related to the retirement of the former
chairman and chief executive
Curtiss-Wright Corporation and Subsidiaries 21
officer. Administrative expenses for 2000 also include approximately $0.9
million associated with the Corporation's proposed recapitalization transaction
(see "Recapitalization" later in this section for more information). Earnings
for 1999 included income related to the termination of benefits for former
employees of its Buffalo, NY plant.
Other Revenues
The Corporation recorded other nonoperating net revenues for 2000 aggregating
$15.5 million compared with $13.4 million in 1999 and $11.7 million in 1998.
Noncash pension income, net of benefits paid, recognized as a result of the
Corporation's overfunded pension plan increased 19% to $7.8 million for 2000.
Rental income declined in 2000 largely due to the settlement of a real estate
tax appeal recorded in 1999, but was 10% above 1998 levels. Investment income
improved over the prior year but was 11% below investment income of 1998,
reflecting the Corporation's acquisition activity in 1999 and 1998. In 2000, the
Corporation sold a nonoperating property in Chester, England resulting in a
pretax gain of approximately $1.4 million.
Changes in Financial Position
Liquidity and Capital Resources
The Corporation's working capital increased 20% at December 31, 2000, totaling
$149.8 million as compared with $124.4 million at December 31, 1999. The ratio
of current assets to current liabilities improved to 3.9 to 1 at December 31,
2000 compared with 3.2 to 1 at the end of 1999. The Corporation's balance of
cash and short-term investments totaled $71.5 million at December 31, 2000,
which increased $36.4 million from the balance at December 31, 1999. The
Corporation's cash and short-term investments had been used to finance the
acquisition of three businesses in 1999, which involved aggregate cash outflows
of $49.3 million.
Working capital changes were highlighted by significant decreases in trade
receivables and net inventories during the year. The Corporation has reduced its
days sales outstanding and improved its inventory turnover. Days sales
outstanding at December 31, 2000 was reduced to 63 days from 77 at December 31,
1999 and inventory turnover improved to 3.8 turns from 3.2 turns at the prior
year end. The decline in receivables was also due, in part, to the receipt of a
real estate tax appeal recovery in early 2000.
At December 31, 2000, the Corporation had two credit agreements in effect
aggregating $100.0 million with a group of five banks. A Revolving Credit
Agreement commits a maximum of $60.0 million to the Corporation for cash
borrowings and letters of credit. The Corporation also has in effect a
Short-Term Credit Agreement, which allows for cash borrowings of $40.0 million.
The unused credit available under these agreements at December 31, 2000 was
$67.1 million. Cash borrowings under the Revolving Credit Agreement were $11.3
million at December 31, 2000 and were $19.5 million at December 31, 1999. During
2000, the Corporation paid $7.6 million towards its Swiss franc denominated
loan, financed under the Revolving Credit Agreement. In 2001, the Corporation
expects to payoff two Industrial Revenue Bond loans totaling approximately $5.3
million.
Capital expenditures were $9.5 million in 2000, decreasing from $19.9 million
spent in 1999 and $10.6 million in 1998. Principal expenditures were for
additional machinery and equipment. Capital expenditures in 1999 included
construction of a new, state-of-the-art Metal Treatment facility in Chester,
England.
In 2001, capital expenditures are expected to increase significantly due to the
continued expansion of the Metal Treatment segment. In addition, expenditures
for machinery and equipment in both the Motion Control and Flow Control segments
are expected to continue. At December 31, 2000, the Corporation had capital
commitments of approximately $1.1 million primarily for the purchase of
equipment in 2001.
During 2000, the Corporation also repurchased 41,270 shares of its common stock
at a total cost of approximately $1.5 million. Since inception, the Corporation
has repurchased a total of 210,930 shares of its common stock at an approximate
cost of $7.5 million.
Cash generated from operations and current short-term investment holdings are
considered adequate to meet the Corporation's overall cash requirements for the
upcoming year, including anticipated debt repayments, planned capital
expenditures, dividends, satisfying environmental obligations and working
capital requirements.
Recapitalization
On November 6, 2000, the Corporation and Unitrin, the holder of approximately
44% of the Corporation's outstanding capital stock, announced a series of
transactions that will permit Unitrin to distribute to its stockholders, in a
tax-free distribution, the approximately 4.4 million shares of the Corporation's
common stock currently held by Unitrin. In order to permit this distribution to
be tax-free for U.S. federal income tax purposes, the Corporation proposes to
make certain changes to its capital structure as more thoroughly described in
the Company's proxy statement filed on or about February 16, 2001. In addition,
if the distribution occurs, the Corporation will pay a special cash dividend of
$0.25 per share to all holders of record of its common stock, other than
Unitrin, which has waived its right to the cash dividend.
The Corporation and Unitrin have entered into a merger agreement that provides
for a recapitalization of the Corporation involving the creation of a new class
of common stock (Class B). In order for the distribution to be tax-free to
Unitrin and its stockholders, Unitrin
22 Curtiss-Wright Corporation and Subsidiaries
must own, at the time of the distribution, capital stock of the Corporation
having the right to elect at least 80% of our board of directors, and must
distribute all of that stock to its stockholders in a single transaction. The
shares of common stock held by Unitrin will be converted into an equivalent
number of shares of the new Class B common stock. Each Corporation stockholder
other than Unitrin will retain its shares of the Corporation's common stock.
These transactions are referred to as the recapitalization.
The holders of shares of Class B common stock will be entitled to elect at least
80% of our board of directors. The holders of shares of common stock will have
the right to elect the remaining members of our board of directors. In all other
respects the rights of the holders of the common stock and the Class B common
stock will be identical, including with respect to voting rights on fundamental
transactions affecting the Corporation, and the right to receive dividends. The
minimum number of directors on our board will be set at five so the holders of
common stock will always be assured of representation. All of the Class B common
stock issued to Unitrin in the recapitalization will be distributed by Unitrin
to its stockholders immediately following the recapitalization.
Newly Issued Accounting Pronouncements
Effective January 1, 2001, the Corporation will begin accounting for derivative
instruments in accordance with Statement of Financial Accounting Standards No.
133 "Accounting for Derivatives and Hedging Activities" (SFAS No. 133). SFAS No.
133 requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. Management of the Corporation anticipates that, due to its
limited use of derivative instruments, the adoption of SFAS No. 133 will have no
effect on its results of operations or its financial position.
Curtiss-Wright Corporation and Subsidiaries 23
report of the corporation
The consolidated financial statements appearing on pages 25 through 40 of this
Annual Report have been prepared by the Corporation in conformity with generally
accepted accounting principles. The financial statements necessarily include
some amounts that are based on the best estimates and judgments of the
Corporation. Other financial information in the Annual Report is consistent with
that in the financial statements.
The Corporation maintains accounting systems, procedures and internal accounting
controls designed to provide reasonable assurance that assets are safeguarded
and that transactions are executed in accordance with the appropriate corporate
authorization and are properly recorded. The accounting systems and internal
accounting controls are augmented by written policies and procedures;
organizational structure providing for a division of responsibilities; selection
and training of qualified personnel and an internal audit program. The design,
monitoring, and revision of internal accounting control systems involve, among
other things, management's judgment with respect to the relative cost and
expected benefits of specific control measures.
PricewaterhouseCoopers LLP, independent certified public accountants, have
examined the Corporation's consolidated financial statements as stated in their
report. Their examination included a study and evaluation of the Corporation's
accounting systems, procedures and internal controls, and tests and other
auditing procedures, all of a scope deemed necessary by them to support their
opinion as to the fairness of the financial statements.
The Audit Committee of the board of directors, composed entirely of directors
from outside the Corporation, among other things, makes recommendations to the
board as to the nomination of independent auditors for appointment by
stockholders and considers the scope of the independent auditors' examination,
the audit results and the adequacy of internal accounting controls of the
Corporation. The independent auditors have direct access to the Audit Committee,
and they meet with the committee from time to time with and without management
present, to discuss accounting, auditing, internal control and financial
reporting matters.
report of independent accountants
To the Board of Directors and Shareholders of
Curtiss-Wright Corporation
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of earnings and stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of
Curtiss-Wright Corporation and its subsidiaries at December 31, 2000 and 1999,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Florham Park, New Jersey
January 31, 2001
24 Curtiss-Wright Corporation and Subsidiaries
consolidated statements of earnings
- -------------------------------------------------------------------------------------------------------------------
For the years ended December 31, (In thousands, except per share data) 2000 1999 1998
- -------------------------------------------------------------------------------------------------------------------
Net sales $ 329,575 $ 293,263 $ 249,413
Cost of sales 208,605 190,852 167,399
- -------------------------------------------------------------------------------------------------------------------
Gross profit 120,970 102,411 82,014
Research and development costs 3,443 2,801 1,346
Selling expenses 18,591 17,015 11,606
General and administrative expenses 49,792 43,121 34,277
Environmental remediation and administrative recoveries,
net of expenses (3,041) (11,683) (1,562)
- -------------------------------------------------------------------------------------------------------------------
Operating income 52,185 51,157 36,347
Investment income, net 2,862 2,295 3,206
Rental income, net 3,638 4,580 3,299
Pension income, net 7,813 6,574 5,126
Other income (expense), net 1,216 (8) 87
Interest expense (1,743) (1,289) (485)
- -------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 65,971 63,309 47,580
Provision for income taxes 24,897 24,264 18,527
- -------------------------------------------------------------------------------------------------------------------
Net earnings $ 41,074 $ 39,045 $ 29,053
- -------------------------------------------------------------------------------------------------------------------
Net Earnings per Common Share:
Basic earnings per share $ 4.10 $ 3.86 $ 2.85
Diluted earnings per share $ 4.03 $ 3.82 $ 2.82
- -------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
Curtiss-Wright Corporation and Subsidiaries 25
consolidated balance sheets
- -----------------------------------------------------------------------------------------------------------------
At December 31, (In thousands) 2000 1999
- -----------------------------------------------------------------------------------------------------------------
Assets:
Current assets:
Cash and cash equivalents $ 8,692 $ 9,547
Short-term investments 62,766 25,560
Receivables, net 67,815 70,729
Inventories, net 50,002 60,584
Deferred tax assets 9,378 8,688
Other current assets 3,419 5,262
- -----------------------------------------------------------------------------------------------------------------
Total current assets 202,072 180,370
- -----------------------------------------------------------------------------------------------------------------
Property, plant and equipment, at cost:
Land 5,024 5,267
Buildings and improvements 95,965 95,631
Machinery, equipment and other 145,907 141,102
- -----------------------------------------------------------------------------------------------------------------
246,896 242,000
Less: accumulated depreciation 156,443 147,422
- -----------------------------------------------------------------------------------------------------------------
Property, plant and equipment, net 90,453 94,578
- -----------------------------------------------------------------------------------------------------------------
Prepaid pension costs 59,765 50,447
Goodwill, net 47,543 50,357
Property held for sale 2,460 2,653
Other assets 7,123 8,721
- -----------------------------------------------------------------------------------------------------------------
Total assets $ 409,416 $ 387,126
- -----------------------------------------------------------------------------------------------------------------
Liabilities:
Current liabilities:
Current portion of long-term debt $ 5,347 $ 4,047
Accounts payable 13,766 13,304
Accrued expenses 19,389 19,463
Income taxes payable 4,157 5,203
Other current liabilities 9,634 13,915
- -----------------------------------------------------------------------------------------------------------------
Total current liabilities 52,293 55,932
- -----------------------------------------------------------------------------------------------------------------
Long-term debt 24,730 34,171
Deferred income taxes 21,689 14,113
Accrued postretirement benefit costs 5,479 8,515
Other liabilities 15,001 16,040
- -----------------------------------------------------------------------------------------------------------------
Total liabilities 119,192 128,771
- -----------------------------------------------------------------------------------------------------------------
Contingencies and Commitments (Notes 9, 13 & 15) Stockholders' Equity:
Preferred stock, $1 par value, 650,000 shares authorized, none issued -- --
Common stock, $1 par value, 22,500,000 shares authorized, 15,000,000 shares issued;
Outstanding shares were 10,017,280 and 10,040,250 at December 31, 2000
and 1999, respectively 15,000 15,000
Additional paid-in capital 51,506 51,599
Retained earnings 411,866 376,006
Unearned portion of restricted stock (22) (24)
Accumulated other comprehensive income (5,626) (2,622)
- -----------------------------------------------------------------------------------------------------------------
472,724 439,959
Less: treasury stock, at cost (4,982,720 shares and 4,959,750 shares at
December 31, 2000 and 1999, respectively) 182,500 181,604
- -----------------------------------------------------------------------------------------------------------------
Total stockholders' equity 290,224 258,355
- -----------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 409,416 $ 387,126
- -----------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
26 Curtiss-Wright Corporation and Subsidiaries
consolidated statements of cash flows
- ------------------------------------------------------------------------------------------------------------------------------------
For the years ended December 31, (In thousands) 2000
1999(1) 1998(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 41,074 $
39,045 $ 29,053
- ------------------------------------------------------------------------------------------------------------------------------------
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 14,346
12,864 9,661
Noncash pension income (7,813)
(6,574) (5,126)
Net (gains) losses on sales and disposals of real estate and equipment (1,390)
- -- 94
Net (gains) losses on short-term investments (206)
390 (266)
Deferred income taxes 6,886
2,300 1,494
Changes in operating assets and liabilities, net of businesses acquired:
Proceeds from sales of trading securities 523,656
394,355 374,802
Purchases of trading securities (560,656)
(353,861) (379,097)
Decrease (increase) in receivables 3,702
6,878 (7,181)
Decrease (increase) in inventories 11,534
2,830 734
(Decrease) increase in progress payments (1,552)
(13,057) (1,248)
Increase (decrease) in accounts payable and accrued expenses 338
(1,734) 2,470
(Decrease) increase in income taxes payable (1,046)
151 207
Decrease (increase) in other assets 4,499
(1,016) (320)
(Decrease) increase in other liabilities (10,081)
241 (236)
Other, net 838
(1,936) 392
- ------------------------------------------------------------------------------------------------------------------------------------
Total adjustments (16,945)
41,831 (3,620)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 24,129
80,876 25,433
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales and disposals of real estate and equipment 3,765
2,586 950
Additions to property, plant and equipment (9,506)
(19,883) (10,642)
Acquisition of new businesses (1,961)
(49,322) (41,711)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities (7,702)
(66,619) (51,403)
- ------------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from short-term borrowing --
- -- 20,523
Proceeds from long-term borrowing --
- -- 9,815
Principal payments on long-term debt (7,575)
- -- --
Common stock repurchases (1,489)
(5,440) (611)
Dividends paid (5,214)
(5,257) (5,309)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash (used for) provided by financing activities (14,278)
(10,697) 24,418
- ------------------------------------------------------------------------------------------------------------------------------------
Effect of foreign currency (3,004)
178 489
- ------------------------------------------------------------------------------------------------------------------------------------
Net (decrease) increase in cash and cash equivalents (855)
3,738 (1,063)
Cash and cash equivalents at beginning of year 9,547
5,809 6,872
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 8,692 $
9,547 $ 5,809
- ------------------------------------------------------------------------------------------------------------------------------------
Supplemental disclosure of noncash investing activities:
Fair value of assets acquired $ 2,231 $
54,868 $ 54,635
Liabilities assumed (270)
(5,034) (10,857)
Cash acquired --
(512) (2,067)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash paid $ 1,961 $
49,322 $ 41,711
- ------------------------------------------------------------------------------------------------------------------------------------
(1) Certain prior year information was reclassified to conform to current
presentation.
See notes to consolidated financial statements.
Curtiss-Wright Corporation and Subsidiaries 27
consolidated statements of stockholders' equity
- ------------------------------------------------------------------------------------------------------------------------------------
Unearned Accumulated
Additional Portion of Other
Common Paid in Retained Restricted Comprehensive
Comprehensive Treasury
(In thousands) Stock Capital Earnings Stock Awards Income
Income Stock
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1997 $15,000 $52,010 $318,474 $(342)
$(3,289) $177,000
- ------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net earnings -- -- 29,053 -- --
$29,053 --
Translation adjustments, net -- -- -- -- 489
489 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income -- -- -- -- --
$29,542
- ------------------------------------------------------------------------------------------------------------------------------------
Common dividends -- -- (5,309) --
- -- --
Common stock repurchase -- -- -- --
- -- 612
Stock options exercised, net -- (341) -- --
- -- (1,158)
Amortization of earned
portion of restricted
stock awards -- -- -- 302
- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1998 15,000 51,669 342,218 (40)
(2,800) 176,454
- ------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net earnings -- -- 39,045 -- --
$39,045 --
Translation adjustments, net -- -- -- -- 178
178 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income -- -- -- -- --
$39,223 --
- ------------------------------------------------------------------------------------------------------------------------------------
Common dividends -- -- (5,257) --
- -- --
Common stock repurchase -- -- -- --
- -- 5,400
Stock options exercised, net -- (70) -- --
- -- (290)
Amortization of earned
portion of restricted
stock awards -- -- -- 16
- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 1999 15,000 51,599 376,006 (24)
(2,622) 181,604
- ------------------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net earnings -- -- 41,074 -- --
$41,074 --
Translation adjustments, net -- -- -- -- (3,004)
(3,004) --
- ------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive income -- -- -- -- --
$38,070 --
- ------------------------------------------------------------------------------------------------------------------------------------
Common dividends -- -- (5,214) --
- -- --
Common stock repurchase -- -- -- --
- -- 1,489
Stock options exercised, net -- (94) -- --
- -- (579)
Restricted stock awards -- 1 -- (15)
- -- (14)
Amortization of earned
portion of restricted
stock awards -- -- -- 17
- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
December 31, 2000 $15,000 $51,506 $411,866 $ (22)
$(5,626) $ 182,500
- ------------------------------------------------------------------------------------------------------------------------------------
See notes to consolidated financial statements.
28 Curtiss-Wright Corporation and Subsidiaries
notes to consolidated financial statements
1. Summary of Significant Accounting Policies
Curtiss-Wright Corporation and its subsidiaries (the "Corporation") is a
diversified multinational manufacturing and service company that designs,
manufactures and overhauls precision components and systems, and provides highly
engineered services to the aerospace, defense, automotive, shipbuilding,
processing, oil, petrochemical, agricultural equipment, railroad, power
generation and metalworking industries. Operations are conducted through eight
manufacturing facilities, thirty-nine metal treatment service facilities and
four component overhaul locations.
A. Principles of Consolidation
The financial statements of the Corporation have been prepared in conformity
with generally accepted accounting principles and such preparation has required
the use of management's estimates in presenting the consolidated accounts of the
Corporation, after elimination of all significant intercompany transactions and
accounts. Management's estimates include assumptions that affect the reported
amount of assets, liabilities, revenue and expenses in the accompanying
financial statements. Actual results may differ from these estimates. Certain
prior year information has been reclassified to conform with current
presentation.
B. Cash Equivalents
Cash equivalents consist of money market funds and commercial paper that are
readily convertible into cash, all with original maturity dates of three months
or less.
C. Progress Payments
Progress payments received under prime contracts and subcontracts have been
deducted from receivables and inventories as disclosed in the appropriate
following notes.
With respect to government contracts, the government has a lien on all materials
and work-in-process to the extent of progress payments.
D. Revenue Recognition
The Corporation records sales and related profits for the majority of its
operations as units are shipped or services are rendered. Sales and estimated
profits under long-term valve contracts are recognized under the
percentage-of-completion method of accounting. Profits are recorded pro rata,
based upon current estimates of direct and indirect manufacturing and
engineering costs to complete such contracts.
Losses on contracts are provided for in the period in which the losses become
determinable. Revisions in profit estimates are reflected on a cumulative basis
in the period in which the basis for such revisions becomes known.
In accordance with industry practice, inventoried costs contain amounts relating
to contracts and programs with long production cycles, a portion of which will
not be realized within one year.
E. Property, Plant and Equipment
Property, plant and equipment are carried at cost. Major renewals and
betterments are capitalized, while maintenance and repairs that do not improve
or extend the life of the asset are expensed in the period they occur.
Depreciation is computed using the straight-line method based upon the estimated
useful lives of the respective assets.
Average useful lives for property and equipment are as follows:
Buildings and improvements 5 to 40 years
Machinery and equipment 5 to 15 years
Office furniture and equipment 3 to 10 years
F. Intangible Assets
Intangible assets consist primarily of the excess purchase price of the
acquisitions over the fair value of net assets acquired. The Corporation
amortizes such costs on a straight-line basis over the estimated period
benefited but not exceeding 30 years. Amortization of intangibles, consisting
primarily of goodwill, totaled $2,561,000, $1,618,000 and $385,000 for the years
ended December 31, 2000, 1999 and 1998, respectively.
The Corporation reviews the recoverability of all long-term assets, including
the related amortization period, whenever events or changes in circumstances
indicate that the carrying amount of an asset might not be recoverable. The
Corporation determines whether there has been an impairment by comparing the
anticipated undiscounted future net cash flows to the related asset's carrying
value. If an asset is considered impaired, the asset is written down to fair
value which is either determined based on discounted cash flows or appraised
values, depending on the nature of the asset. There were no such write-downs in
2000, 1999 or 1998.
G. Fair Value of Financial Instruments
The financial instruments with which the Corporation is involved are primarily
of a traditional nature. The Corporation's short-term investments are comprised
of equity and debt securities, all classified as trading securities, which are
carried at their fair value based upon the quoted market prices of those
investments at December 31, 2000 and 1999. Accordingly, net realized and
unrealized gains and losses on trading securities are included in net earnings.
Due to the short maturities of cash and cash equivalents, accounts receivable,
accounts payable and accrued expenses, the carrying value of these financial
instruments approximates fair value. The carrying amount
Curtiss-Wright Corporation and Subsidiaries 29
of long-term debt approximates fair value because the interest rates are reset
periodically to reflect current market conditions and rates.
H. Environmental Costs
The Corporation establishes a reserve for a potential environmental
responsibility when it concludes that a determination of legal liability is
probable, based upon the advice of counsel. Such amounts, if quantifiable,
reflect the Corporation's estimate of the amount of that liability. If only a
range of potential liability can be estimated, a reserve will be established at
the low end of that range. Such reserves represent today's values of anticipated
remediation, not recognizing any recovery from insurance carriers or third-party
legal actions, and are not discounted.
I. Accounting for Stock-Based Compensation
The Corporation follows Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees" (APB No. 25), in accounting for its employee
stock options, rather than the alternative method of accounting provided under
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" (SFAS No. 123). Under APB No. 25, the Corporation does not
recognize compensation expense on stock options granted to employees when the
exercise price of the options is equal to the market price of the underlying
stock on the date of the grant. Further information concerning options granted
under the Corporation's Long-Term Incentive Plan is provided in Note 10.
J. Capital Stock
In October 1998, the Corporation initiated a stock repurchase program, approved
by its board of directors, under which the Company is authorized to purchase up
to 300,000 shares or approximately 3% of its outstanding common stock. Purchases
were authorized to be made from time to time in the open market or privately
negotiated transactions, depending on market and other conditions, based upon
the view of the Corporation that market prices of the stock did not adequately
reflect the true value of the Corporation and, therefore, represented an
attractive investment opportunity. Through December 31, 2000, the Corporation
has repurchased 210,930 shares under this program.
K. Earnings Per Share
The Corporation is required to report both basic earnings per share (EPS), based
on the weighted average number of common shares outstanding, and diluted
earnings per share based on the weighted average number of common shares
outstanding plus all potentially dilutive common shares issuable. At December
31, 2000, the Corporation had approximately 124,000 additional stock options
outstanding that could potentially dilute basic EPS in the future. The effect of
these options was not included in the computation of diluted EPS because to do
so would have been antidilutive for the period. The Corporation had antidilutive
options of approximately 334,000 at December 31, 1999 and no antidilutive
options at December 31, 1998. Earnings per share calculations for the years
ended December 31, 2000, 1999 and 1998 are as follows:
- --------------------------------------------------------------------------------
Weighted
Average Earnings
Net Shares Per Share
(In thousands, except per share data) Income Outstanding Amount
- --------------------------------------------------------------------------------
2000:
Basic earnings per share $41,074 10,015 $4.10
Effective of dilutive securities:
Stock options 176
Deferred stock compensation 3
- --------------------------------------------------------------------------------
Diluted earnings per share $41,074 10,194 $4.03
- --------------------------------------------------------------------------------
1999:
Basic earnings per share $39,045 10,115 $3.86
Effective of dilutive securities:
Stock options 99
Deferred stock compensation 1
- --------------------------------------------------------------------------------
Diluted earnings per share $39,045 10,215 $3.82
- --------------------------------------------------------------------------------
1998:
Basic earnings per share $29,053 10,194 $2.85
Effective of dilutive securities:
Stock options 109
Deferred stock compensation 2
- --------------------------------------------------------------------------------
Diluted earnings per share $29,053 10,305 $2.82
- --------------------------------------------------------------------------------
L. Newly Issued Accounting Pronouncements
Effective January 1, 2001, the Corporation will begin accounting for derivative
instruments in accordance with Statement of Financial Accounting Standards No.
133 "Accounting for Derivatives and Hedging Activities" (SFAS No. 133). SFAS No.
133 requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. Management of the Corporation anticipates that, due to its
limited use of derivative instruments, the adoption of SFAS No. 133 will have no
effect on its results of operations or its financial position.
2. Acquisitions
The Corporation acquired one business in 2000 and three businesses in 1999, as
described below. All companies acquired have been accounted for as purchases
with the excess of the purchase price over the estimated fair value of the net
assets acquired
30 Curtiss-Wright Corporation and Subsidiaries
recorded as goodwill. The results of each operation have been included in the
consolidated financial results of the Corporation from the date of acquisition.
EF Quality Heat Treating Company
On December 14, 2000, the Corporation acquired EF Quality Heat Treating Company
("EF"), a Midwest provider of quality heat treating services primarily to the
automotive industry. EF provides high quality atmosphere normalizing, annealing
and stress relieving services from its Salem, Ohio location.
The Corporation acquired the net assets of the EF business for approximately
$2.2 million, subject to adjustment as provided for in the agreement. This
acquisition has been accounted for as a purchase in the fourth quarter of 2000.
The excess of the purchase price over the fair value of the net assets acquired
is approximately $1.0 million and is being amortized over 25 years. The fair
value of the net assets acquired was based on preliminary estimates and may be
revised at a later date.
Farris Engineering and Sprague Products
On August 27, 1999, the Corporation completed its acquisition of the Farris and
Sprague business units of Teledyne Fluid Systems, an Allegheny Teledyne
Incorporated company.
Farris is one of the world's leading manufacturers of pressure-relief valves for
use in processing industries, which include refineries, petrochemical/chemical
plants and pharmaceutical manufacturing. Products are manufactured in
Brecksville, Ohio and Brantford, Ontario. A service and distribution center is
located in Edmonton, Alberta. The Sprague business, also located in Brecksville,
Ohio, provides specialty hydraulic and pneumatic valves and air-driven pumps and
gas boosters under the "Sprague" and "PowerStar" trade names for general
industrial applications as well as directional control valves for truck
transmissions and car transport carriers.
The Corporation acquired the net assets of the Farris and Sprague businesses for
$42.9 million in cash. This acquisition has been accounted for as a purchase in
the third quarter of 1999. The excess of the purchase price over the fair value
of the net assets acquired was $18.5 million and is being amortized over 30
years.
Metallurgical Processing Inc.
On June 30, 1999, the Corporation acquired Metallurgical Processing, Inc. (MPI),
a Midwest supplier of commercial heat-treating services, primarily to the
automotive and industrial markets. MPI provides a number of metal-treatment
processes including carburizing, hardening, and carbonitriding and services a
broad spectrum of customers from its Fort Wayne, Indiana location.
The Corporation acquired the stock of MPI for $7.4 million in cash (of which
$1.0 million has been deferred for two years) and accounted for the acquisition
as a purchase in the second quarter of 1999. The excess of the purchase price
over the fair value of the net assets acquired was $2.2 million and is being
amortized over 25 years.
3. Short-term Investments
The composition of short-term investments is as follows:
- --------------------------------------------------------------------------------
December 31, 2000 1999
- --------------------------------------------------------------------------------
(In thousands) Cost Fair Value Cost Fair Value
- --------------------------------------------------------------------------------
Money market
preferred stock $16,700 $16,700 $11,400 $11,400
Common and
preferred stocks 2,104 2,166 2,104 1,960
Tax exempt
revenue bonds 43,900 43,900 12,200 12,200
- --------------------------------------------------------------------------------
Total short-term
investments $62,704 $62,766 $25,704 $25,560
- --------------------------------------------------------------------------------
Investment income for the years ended December 31 consists of:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Net realized gains on the sales
of trading securities $ 135 $ 274 $ 141
Interest and dividend
income, net 2,521 2,361 2,940
Net unrealized holding
gains (losses) 206 (340) 125
- --------------------------------------------------------------------------------
Investment income, net $ 2,862 $ 2,295 $ 3,206
- --------------------------------------------------------------------------------
4. Receivables
Receivables include current notes, amounts billed to customers, claims and other
receivables and unbilled revenue on long-term contracts consisting of amounts
recognized as sales but not billed. Substantially all amounts of unbilled
receivables are expected to be billed and collected in the subsequent year.
Credit risk is generally diversified due to the large number of entities
comprising the Corporation's customer base and their geographic dispersion. The
largest single customer represented 7% of the total outstanding billed
receivables at December 31, 2000 and 8% of the total outstanding billed
receivables at December 31, 1999. This same customer of the Motion Control
segment accounted for 13% of consolidated revenue in 2000, 14% in 1999 and 16%
in 1998. In
Curtiss-Wright Corporation and Subsidiaries 31
addition, the Corporation is either a prime or subcontractor of various agencies
of the U.S. government. Revenues derived either directly or indirectly from
government sources (primarily the U.S. government) totaled $56,400,000, or 17%
of consolidated revenue in 2000, $50,116,000, or 17% in 1999 and $41,565,000, or
17% in 1998.
The Corporation performs ongoing credit evaluations of its customers and
establishes appropriate allowances for doubtful accounts based upon factors
surrounding the credit risk of specific customers, historical trends and other
information.
The composition of receivables is as follows:
- --------------------------------------------------------------------------------
(In thousands) December 31, 2000 1999
- --------------------------------------------------------------------------------
Billed Receivables:
Trade and other receivables $ 59,904 $ 66,652
Less: progress payments applied (1,508) (1,922)
allowance for doubtful accounts (2,659) (3,230)
- --------------------------------------------------------------------------------
Net billed receivables 55,737 61,500
- --------------------------------------------------------------------------------
Unbilled Receivables:
Recoverable costs and estimated earnings
not billed 18,091 16,473
Less: progress payments applied (7,040) (7,244)
- --------------------------------------------------------------------------------
Net unbilled receivables 11,051 9,229
- --------------------------------------------------------------------------------
Notes Receivable 1,027 --
- --------------------------------------------------------------------------------
Total receivables, net $ 67,815 $ 70,729
- --------------------------------------------------------------------------------
5. Inventories
Inventories are valued at the lower of cost (principally average cost) or
market. The composition of inventories is as follows:
- --------------------------------------------------------------------------------
(In thousands) December 31, 2000 1999
- --------------------------------------------------------------------------------
Raw material $ 11,955 $ 12,952
Work-in-process 10,815 15,493
Finished goods/component parts 32,621 36,276
Inventoried costs related to
U.S. government and other
long-term contracts 5,961 7,714
- --------------------------------------------------------------------------------
Gross Inventories 61,352 72,435
Less: inventory reserves (10,944) (10,511)
progress payments applied,
principally related to
long-term contracts (406) (1,340)
- --------------------------------------------------------------------------------
Net inventories $ 50,002 $ 60,584
- --------------------------------------------------------------------------------
6. Accrued Expenses and Other Current Liabilities
Accrued expenses consist of the following:
- --------------------------------------------------------------------------------
(In thousands) December 31, 2000 1999
- --------------------------------------------------------------------------------
Accrued compensation $ 9,117 $ 7,545
Accrued taxes other than income taxes 2,073 1,961
Accrued insurance 1,812 1,623
All other 6,387 8,334
- --------------------------------------------------------------------------------
Total accrued expenses $ 19,389 $ 19,463
- --------------------------------------------------------------------------------
Other current liabilities consist of the following:
- --------------------------------------------------------------------------------
(In thousands) December 31, 2000 1999
- --------------------------------------------------------------------------------
Customer advances $ 3,734 $ 2,338
Current portion of environmental reserves 1,393 2,717
Anticipated losses on long-term contracts 1,322 2,280
Due tenants on tax recovery -- 3,520
All other 3,185 3,060
- --------------------------------------------------------------------------------
Total other current liabilities $ 9,634 $ 13,915
- --------------------------------------------------------------------------------
32 Curtiss-Wright Corporation and Subsidiaries
7. Income Taxes
Earnings before income taxes for the years ended December 31 consist of:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Domestic $48,550 $47,088 $33,320
Foreign 17,421 16,221 14,260
- --------------------------------------------------------------------------------
Total $65,971 $63,309 $47,580
- --------------------------------------------------------------------------------
The provision for income taxes for the years ended December 31 consist of:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999 1998
- --------------------------------------------------------------------------------
Current:
Federal $ 9,342 $11,843 $ 8,835
State 2,571 3,619 3,045
Foreign 5,809 6,000 5,019
- --------------------------------------------------------------------------------
17,722 21,462 16,899
- --------------------------------------------------------------------------------
Deferred:
Federal 5,953 2,143 1,231
State 966 407 397
Foreign 256 252 --
- --------------------------------------------------------------------------------
7,175 2,802 1,628
- --------------------------------------------------------------------------------
Provision for income taxes $24,897 $24,264 $18,527
- --------------------------------------------------------------------------------
The effective tax rate varies from the U.S. federal statutory tax rate for the
years ended December 31 principally due to the following:
- --------------------------------------------------------------------------------
2000 1999 1998
- --------------------------------------------------------------------------------
U.S. Federal statutory tax rate 35.0% 35.0% 35.0%
Add (deduct):
Dividends received deduction
and tax exempt income (0.8) (0.8) (1.4)
State and local taxes 3.5 4.1 4.7
All other, net -- -- 0.6
- --------------------------------------------------------------------------------
Effective tax rate 37.7% 38.3% 38.9%
- --------------------------------------------------------------------------------
The components of the Corporation's deferred tax assets and liabilities at
December 31 are as follows:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Deferred tax assets:
Environmental cleanup $ 5,416 $ 6,119
Inventories 4,440 4,407
Postretirement/postemployment
benefits 2,229 3,540
Incentive compensation 1,737 1,589
Vacation pay 1,159 1,048
Other 1,953 3,372
- --------------------------------------------------------------------------------
Total deferred tax assets $ 16,934 $ 20,075
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Retirement plans $ 22,929 $ 19,265
Depreciation 4,270 4,697
Other 2,046 1,538
- --------------------------------------------------------------------------------
Total deferred tax liabilities $ 29,245 $ 25,500
- --------------------------------------------------------------------------------
Net deferred tax liabilities $ 12,311 $ 5,425
- --------------------------------------------------------------------------------
Deferred tax assets and liabilities are reflected on the Corporation's
consolidated balance sheets at December 31 as follows:
- --------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------
Current deferred tax assets $ 9,378 $ 8,688
Noncurrent deferred tax liabilities (21,689) (14,113)
- --------------------------------------------------------------------------------
Net deferred tax liabilities $(12,311) $ (5,425)
- --------------------------------------------------------------------------------
Income tax payments of $15,466,000 were made in 2000, $20,954,000 in 1999, and
$16,321,000 in 1998.
At December 31, 2000, the balance of undistributed earnings of foreign
subsidiaries was $2,760,000. It is presumed that ultimately these earnings will
be distributed to the Corporation. The tax effect of this presumption was
determined by assuming that these earnings were remitted to the Corporation in
the current period, and that the Corporation received the benefit of all
available tax alternatives, tax credits and deductions. Under these assumptions,
no federal income tax provision was required.
Curtiss-Wright Corporation and Subsidiaries 33
8. Long-term Debt
Long-term debt at December 31 consists of the following:
- --------------------------------------------------------------------------------
(In thousands) 2000 1999
- --------------------------------------------------------------------------------
Industrial Revenue Bonds, due from 2001
to 2028. Weighted average interest
rate is 4.07% and 3.12% per annum
for 2000 and 1999, respectively $ 18,747 $ 18,747
- --------------------------------------------------------------------------------
Revolving Credit Agreement Borrowing,
due 2004. Weighted average interest rate
is 3.49% for 2000 and 2.94% for 1999 11,330 19,471
- --------------------------------------------------------------------------------
Total debt 30,077 38,218
- --------------------------------------------------------------------------------
Less: Portion due within one year (5,347) (4,047)
- --------------------------------------------------------------------------------
Total Long-term Debt $ 24,730 $ 34,171
- --------------------------------------------------------------------------------
Debt under the Corporation's revolving credit agreement is denominated in Swiss
francs. Actual borrowings were 18,250,000 and 31,000,000 Swiss francs at
December 31, 2000 and 1999, respectively. The carrying amount of long-term debt
approximates fair value because the interest rates are reset periodically to
reflect market conditions and rates.
Aggregate maturities of debt are as follows:
- --------------------------------------------------------------------------------
(In thousands)
- --------------------------------------------------------------------------------
2001 $ 5,347
2002 --
2003 --
2004 11,330
2005 --
2006 and beyond 13,400
- --------------------------------------------------------------------------------
$30,077
- --------------------------------------------------------------------------------
Interest payments of approximately $1,006,000, $818,000 and $470,000 were made
in 2000, 1999 and 1998, respectively.
9. Credit Agreements
The Corporation has two credit agreements in effect aggregating $100,000,000
with a group of five banks. The credit agreements allow for borrowings to be
denominated in a number of foreign currencies. The Revolving Credit Agreement
commits a maximum of $60,000,000 to the Corporation for cash borrowings and
letters of credit. The unused credit available under this facility at December
31, 2000 was $27,086,000 and was $18,226,000 at December 31, 1999. Cash
borrowings under the Revolving Credit Agreement at December 31, 2000 were
$11,330,000 with a weighted average interest rate of 3.49%. Cash borrowings at
December 31, 1999 were $19,471,000 with a weighted average interest rate of
2.94%. The commitment made under the Revolving Credit Agreement expires December
17, 2004, but may be extended annually for successive one-year periods with the
consent of the bank group. The Corporation also has in effect a Short-Term
Credit Agreement which allows for cash borrowings of $40,000,000, of which
$40,000,000 was available at December 31, 2000 and December 31, 1999. The
Short-Term Credit Agreement expires December 14, 2001. The Short-Term Credit
Agreement may be extended for additional periods, with the consent of the bank
group, for additional periods not to exceed 364 days each. The Corporation is
required under these Agreements to maintain certain financial ratios, and meet
certain net worth and indebtedness tests for which the Corporation is in
compliance.
At December 31, 2000, substantially all of the industrial revenue bond issues
are collateralized by real estate, machinery and equipment. Certain of these
issues are supported by letters of credit, which total approximately
$17,793,000. The Corporation has various other letters of credit totaling
approximately $3,800,000, most of which are now included under the Revolving
Credit Agreement.
10. Stock Compensation Plans
Stock-Based Compensation: Pro forma information regarding net earnings and
earnings per share is required by SFAS No. 123 and has been determined as if the
Corporation had accounted for its 2000, 1999 and 1998 employee stock option
grants under the fair value method of that Statement. Information with regard to
the number of options granted, market price of the grants, vesting requirements
and the maximum term of the options granted appears by plan type in the sections
below. The fair value for these options was estimated at the date of grant using
a Black-Scholes option pricing model with the following weighted average
assumptions:
- --------------------------------------------------------------------------------
2000 1999 1998
- --------------------------------------------------------------------------------
Risk-free interest rate 5.87% 6.09% 4.80%
Expected volatility 23.96% 25.06% 18.80%
Expected dividend yield 1.09% 1.37% 1.38%
Weighted average option life 7 years 7 years 7 years
- --------------------------------------------------------------------------------
34 Curtiss-Wright Corporation and Subsidiaries
The estimated fair value of the option grants are amortized to expense over the
options' vesting period beginning January 1 of the following year, due to the
timing of the grants. The Corporation's pro forma information for the years
ended December 31, 2000, 1999 and 1998 is as follows:
- --------------------------------------------------------------------------------
(In thousands, except per share data) 2000 1999 1998
- --------------------------------------------------------------------------------
Net earnings:
As reported $ 41,074 $ 39,045 $ 29,053
Pro forma $ 40,074 $ 38,430 $ 28,509
Net earnings per common share:
As reported:
Basic $ 4.10 $ 3.86 $ 2.85
Diluted $ 4.03 $ 3.82 $ 2.82
Pro forma:
Basic $ 4.00 $ 3.80 $ 2.80
Diluted $ 3.93 $ 3.76 $ 2.77
- --------------------------------------------------------------------------------
Long-Term Incentive Plan: Under a Long-Term Incentive Plan approved by
stockholders in 1995, an aggregate total of 1,000,000 shares of common stock
(after 1997 2 for 1 stock split) were reserved for issuance under said Plan. No
more than 50,000 shares of common stock subject to the Plan may be awarded in
any year to any one participant in the Plan.
Under this Plan, the Corporation awarded 1,604,825 performance units in 2000,
1,539,778 in 1999 and 1,184,604 in 1998 to certain key employees. The
performance units are denominated in dollars and are contingent upon the
satisfaction of performance objectives keyed to profitable growth over a period
of three fiscal years commencing with the fiscal year following such awards. The
anticipated cost of such awards is expensed over the three-year performance
period. However, the actual cost of the performance units may vary from total
value of the awards depending upon the degree to which the key performance
objectives are met.
Under this Plan, the Corporation has granted nonqualified stock options in 2000,
1999 and 1998 to key employees. Stock options granted under this Plan expire ten
years after the date of the grant and are exercisable as follows: up to
one-third of the grant after one full year, up to two-thirds of the grant after
two full years and in full three years from the date of grant. Stock option
activity during the periods is indicated as follows:
- --------------------------------------------------------------------------------
Weighted
Average
Exercise Options
Shares Price Exercisable
- --------------------------------------------------------------------------------
Outstanding at
December 31, 1997 369,826 $ 24.76 216,398
Granted 118,886 37.66
Exercised (31,554) 19.13
Forfeited (20,657) 30.59
- --------------------------------------------------------------------------------
Outstanding at
December 31, 1998 436,501 28.63 242,071
Granted 147,551 37.82
Exercised (6,155) 21.01
Forfeited (20,276) 34.78
- --------------------------------------------------------------------------------
Outstanding at
December 31, 1999 557,621 30.92 310,586
Granted 124,398 47.72
Exercised (16,080) 22.93
Forfeited (13,225) 37.18
- --------------------------------------------------------------------------------
Outstanding at
December 31, 2000 652,714 $ 34.19 396,049
- --------------------------------------------------------------------------------
Stock Plan for Non-Employee Directors: The Stock Plan for Non-Employee
Directors, approved by stockholders in 1996, authorized the grant of restricted
stock awards and, at the option of the directors, the payment of regular
stipulated compensation and meeting fees in equivalent shares. In April 2000,
the Corporation granted its newest non-employee director restricted stock,
valued at $38.19 per share, the market price on the date of the award. The cost
of the restricted stock awards is being amortized over a five-year restriction
period from the date of grant. At December 31, 2000, the Corporation had
provided for an aggregate additional 11,210 shares, at an average price of
$33.27, for its non-employee directors pursuant to election by directors to
receive such shares in lieu of payment for earned compensation under the Plan.
Depending on the extent to which the non-employee directors elect to receive
future compensation in shares, total awards under this Plan could reach or
exceed 16,000 shares by April 12, 2006, the termination date of the Plan.
Pursuant to elections, 1,546 shares were issued as compensation in 2000 under
the Plan.
Curtiss-Wright Corporation and Subsidiaries 35
11. Environmental Costs
The Corporation has continued the operation of the ground water and soil
remediation activities at the Wood-Ridge, New Jersey site through 2000. The cost
of constructing and operating this site was provided for in 1990 when the
Corporation established a $21,000,000 reserve to remediate the property. Costs
for operating and maintaining this site totaled $490,000 in 2000, $563,000 in
1999, and $854,000 in 1998.
The Corporation has previously filed lawsuits against several insurance carriers
seeking recovery for environmental costs. The Corporation settled with one
carrier in 1998 and two carriers in 1999. During 2000, the Corporation settled
with the remaining carriers. The amount of these settlements in 2000 totaled
$4,409,000, net of associated expenses. No potential recovery from this lawsuit
has been utilized to offset or reduce any of the Corporation's environmental
liabilities. During the year, several sites required increases in the previously
established reserve for those sites in the amount of $1,746,000. In addition,
one site required a decrease in the reserve during 2000 in the amount of
$381,000.
The Corporation has been named as a potentially responsible party, as have many
other corporations and municipalities, in a number of environmental clean-up
sites. The Corporation continues to make progress in resolving these claims
through settlement discussions and payments from reserves previously
established. Significant sites remaining open at the end of the year are:
Caldwell Trucking landfill superfund site, Fairfield, New Jersey; Sharkey
landfill superfund site, Parsippany, New Jersey; Pfohl Brothers landfill site,
Cheektowaga, New York; Amenia landfill site, Amenia, New York; and Chemsol, Inc.
superfund site, Piscataway, New Jersey. The Corporation believes that the
outcome for any of these remaining sites will not have a materially adverse
effect on the Corporation's results of operations or financial condition.
The noncurrent environmental obligation on the books at December 31, 2000 was
$9,925,000, compared to $8,857,000 at December 31, 1999.
12. Pension and Other Postretirement Benefit Plans
The Corporation maintains a noncontributory defined benefit pension plan
covering substantially all employees. The Curtiss-Wright Retirement Plan formula
for nonunion employees is based on years of credited service and the five
highest consecutive years' compensation during the last ten years of service and
a "cash balance" benefit. Union employees who have negotiated a benefit under
this Plan are entitled to a benefit based on years of service multiplied by a
monthly pension rate. Employees are eligible to participate in this Plan after
one year of service and are vested after five years of service. At December 31,
2000 and December 31, 1999, the Corporation had prepaid pension costs of
$59,765,000 and $50,447,000, respectively, under this Plan. At December 31,
2000, approximately 35% of the Plan's assets are invested in debt securities,
including a portion in U.S. government issues. Approximately 65% of plan assets
are invested in equity securities.
In addition, the Corporation provided postretirement health benefits to certain
employees.
The Corporation also maintains a nonqualified Restoration Plan covering those
employees whose compensation or benefits exceeds the IRS limitation for pension
benefits. Benefits under this Plan are not funded and as such, the Corporation
had an accrued pension liability of $1,226,000 and $2,102,000 at December 31,
2000 and 1999, respectively. In addition, the Corporation had foreign pension
costs under retirement plans of $864,000, $734,000 and $367,000 in 2000, 1999
and 1998, respectively.
36 Curtiss-Wright Corporation and Subsidiaries
- ----------------------------------------------------------------------------------------------------------
Pension Benefits Postretirement Benefits
- ----------------------------------------------------------------------------------------------------------
(In thousands) 2000 1999 2000 1999
- ----------------------------------------------------------------------------------------------------------
Change in Benefit Obligation:
Benefit obligation at beginning of year $ 106,965 $ 109,487 $ 3,955 $ 5,187
Service cost 4,803 4,703 118 191
Interest cost 7,256 7,377 181 298
Plan participants' contributions -- -- 158 42
Actuarial gain 2,022 (338) (168) (264)
Benefits paid (17,619) (14,264) (280) (401)
Change due to curtailment of benefits -- -- (1,937) (1,098)
- ----------------------------------------------------------------------------------------------------------
Benefit obligation at end of year 103,427 106,965 2,027 3,955
- ----------------------------------------------------------------------------------------------------------
Change in Plan Assets:
Fair value of plan assets, beginning of year 237,813 216,882 -- --
Actual return on plan assets 30,107 35,105 -- --
Employer contribution 2,381 90 122 359
Plan participants' contribution -- -- 158 42
Benefits paid (17,619) (14,264) (280) (401)
- ----------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year 252,682 237,813 -- --
- ----------------------------------------------------------------------------------------------------------
Funded status 149,255 130,848 (2,027) (3,955)
Unrecognized net actuarial gain (88,765) (78,326) (2,532) (2,925)
Unrecognized transition obligation (2,206) (4,394) -- --
Unrecognized prior service costs 255 217 (920) (1,635)
- ----------------------------------------------------------------------------------------------------------
Prepaid (accrued) benefit costs $ 58,539 $ 48,345 $ (5,479) $ (8,515)
- ----------------------------------------------------------------------------------------------------------
Components of Net Periodic
Benefit Cost (Revenue):
Service cost $ 4,803 $ 4,703 $ 118 $ 191
Interest cost 7,256 7,377 181 298
Expected return on plan assets (16,973) (15,579) -- --
Amortization of prior service cost (36) (36) (123) (193)
Amortization of transition obligation (2,188) (2,188) -- --
Recognized net actuarial gain (2,090) (851) (200) (184)
Benefit cost reduction due to curtailment -- -- (2,890) (813)
Cost of settlement 1,415 -- -- --
- ----------------------------------------------------------------------------------------------------------
Net periodic benefit revenue $ (7,813) $ (6,574) $ (2,914) $ (701)
- ----------------------------------------------------------------------------------------------------------
Weighted-average assumptions as of December 31:
Discount rate 7.00% 7.00% 7.00% 7.00%
Expected return on plan assets 8.50% 8.50% -- --
Rate of compensation increase 4.50% 4.50% -- --
- ----------------------------------------------------------------------------------------------------------
Curtiss-Wright Corporation and Subsidiaries 37
For measurement purposes, a 7.85% annual rate of increase in the per capita cost
of covered health care benefits was assumed for 2000. The rate was assumed to
decrease gradually to 5.5% over the next seven years and remaining at that level
thereafter.
Effect of change in health care cost trend on:
- --------------------------------------------------------------------------------
(In thousands) 1% Increase 1% Decrease
- --------------------------------------------------------------------------------
Total service and interest
cost components $ 30 $ (40)
Postretirement benefit obligation $ 252 $(230)
- --------------------------------------------------------------------------------
The Corporation discontinued postretirement medical coverage for former
employees of its Fairfield, NJ plant due to its closure, which resulted in
income of $2,890,000 in 2000 and for the former employees of its Buffalo, NY
plant, which resulted in income of $813,000 in 1999.
13. Leases
Buildings and Improvements Leased to Others. The Corporation leases certain of
its buildings and related improvements to outside parties under noncancelable
operating leases. Cost and accumulated depreciation of the leased buildings and
improvements at December 31, 2000, were $49,575,000 and $44,166,000,
respectively, and at December 31, 1999, were $50,878,000 and $44,095,000,
respectively.
Facilities and Equipment Leased from Others. The Corporation conducts a portion
of its operations from leased facilities, which include manufacturing and
service facilities, administrative offices and warehouses. In addition, the
Corporation leases automobiles, machinery and office equipment under operating
leases. Rental expenses for all operating leases amounted to approximately
$4,273,000 in 2000, $2,770,000 in 1999 and $2,586,000 in 1998.
At December 31, 2000, the approximate future minimum rental income and
commitment under operating leases that have initial or remaining noncancelable
lease terms in excess of one year are as follows:
- --------------------------------------------------------------------------------
Rental Rental
(In thousands) Income Commitment
- --------------------------------------------------------------------------------
2001 $ 5,470 $ 4,189
2002 3,783 3,931
2003 2,592 3,689
2004 2,004 3,062
2005 1,171 1,577
2006 and beyond 9,133 2,000
- --------------------------------------------------------------------------------
$24,153 $18,448
- --------------------------------------------------------------------------------
14. Industry Segments
The Corporation manages and evaluates its operations in three reportable
segments: Motion Control, Metal Treatment and Flow Control. The operating
segments are managed separately because each offers different products and
serves different markets. The principal products and major markets of the three
operating segments are described in the At a Glance section of this Annual
Report.
The accounting policies of the operating segments are the same as those
described in the summary of significant accounting policies. Interest income is
not reported on an operating segment basis because short-term investments and
returns on those investments are aggregated and evaluated separately from
business operations. Interest expense and income taxes are also not reported on
an operating segment basis because they are not considered in the performance
evaluation by the Corporation's chief operating decision-maker, its chairman and
CEO.
The Corporation had one commercial customer in the Motion Control segment, which
accounted for 13% of consolidated revenue in 2000, 14% in 1999 and 16% in 1998.
38 Curtiss-Wright Corporation and Subsidiaries
Consolidated Industry Segment Information:
- ---------------------------------------------------------------------------------------------------------------------
Motion Metal Flow Segment Corporate
Consolidated
(In thousands) Control(1) Treatment Control Total & Other Total
- ---------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 2000:
Revenue from external customers $ 126,771 $ 105,318 $ 97,486 $ 329,575 $ -- $
329,575
Intersegment revenues -- 508 -- 508 --
508
Operating income 15,383 23,502 10,276 49,161 3,024
52,185
Depreciation and amortization expense 4,086 5,031 4,124 13,241 1,105
14,346
Segment assets at year end 96,955 84,538 82,670 264,163 145,253
409,416
Expenditures for long-lived assets 1,776 5,451 1,826 9,053 453
9,506
- ---------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1999:
Revenue from external customers $ 124,155 $ 104,143 $ 64,965 $ 293,263 $ -- $
293,263
Intersegment revenues -- 337 -- 337 --
337
Operating income 8,667 23,551 6,082 38,300 12,857
51,157
Depreciation and amortization expense 5,056 4,407 2,355 11,818 1,046
12,864
Segment assets at year end 112,943 83,350 95,214 291,507 95,619
387,126
Expenditures for long-lived assets 3,433 14,530 1,543 19,506 377
19,883
- ---------------------------------------------------------------------------------------------------------------------
Year Ended December 31, 1998:
Revenue from external customers $ 105,400 $ 105,999 $ 38,014 $ 249,413 $ -- $
249,413
Intersegment Revenues -- 554 -- 554 --
554
Operating income (loss) (1,413) 30,020 5,161 33,768 2,579
36,347
Depreciation and amortization expense 3,608 3,792 1,246 8,646 1,015
9,661
Segment assets at year end 119,351 68,198 40,080 227,629 125,111
352,740
Expenditures for long-lived assets 2,111 6,053 2,180 10,344 298
10,642
- ---------------------------------------------------------------------------------------------------------------------
(1) Operating income for the Motion Control segment includes consolidation
costs for the relocation of operations in the amount of $3.8 million for
1999 and $0.8 million for 1998.
Curtiss-Wright Corporation and Subsidiaries 39
Reconciliations:
- -----------------------------------------------------------------------------------------
For the years ended December 31, (In thousands) 2000 1999 1998
- -----------------------------------------------------------------------------------------
Revenues:
Total segment revenue $ 329,575 $ 293,263 $ 249,413
Intersegment revenue 508 337 554
Elimination of intersegment revenue (508) (337) (554)
- -----------------------------------------------------------------------------------------
Total consolidated revenues $ 329,575 $ 293,263 $ 249,413
- -----------------------------------------------------------------------------------------
Earnings before taxes:
Total segment operating income $ 49,161 $ 38,300 $ 33,768
Insurance settlements, net 3,041 11,683 1,562
Corporate and other (17) 1,174 1,017
Investment income, net 2,862 2,295 3,206
Rental income, net 3,638 4,580 3,299
Pension income, net 7,813 6,574 5,126
Other income (expense), net 1,216 (8) 87
Interest expense (1,743) (1,289) (485)
- -----------------------------------------------------------------------------------------
Total consolidated earnings before tax $ 65,971 $ 63,309 $ 47,580
- -----------------------------------------------------------------------------------------
Assets (at December 31):
Total assets for reportable segments $ 264,163 $ 291,507 $ 227,629
Short-term investments 62,766 25,560 66,444
Pension assets 59,765 50,447 43,822
Other assets 22,801 19,652 14,914
Elimination of intersegment receivables (79) (40) (69)
- -----------------------------------------------------------------------------------------
Total consolidated assets $ 409,416 $ 387,126 $ 352,740
- -----------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
December 31, (In thousands) 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------
Long-Lived Long-Lived
Long-Lived
Revenues(1) Assets Revenues(1) Assets Revenues(1)
Assets
- ------------------------------------------------------------------------------------------------------------------------
Geographic Information:
United States $213,343 $211,964 $200,253 $209,370 $165,567
$217,668
United Kingdom 32,133 22,666 29,762 20,986 32,320
11,454
Other foreign countries 84,099 12,266 63,248 11,644 51,526
8,093
- ------------------------------------------------------------------------------------------------------------------------
Consolidated total $329,575 $246,896 $293,263 $242,000 $249,413
$237,215
- ------------------------------------------------------------------------------------------------------------------------
(1) Revenues are attributed to countries based on the location of the
customer.
15. Contingencies and Commitments
The Corporation's Drive Technology subsidiary located in Switzerland entered
into a sales agreement with the Spanish Ministry of Defense which contained an
offset obligation for the purchase of approximately 24 million Swiss francs of
product from Spanish suppliers over a seven-year period which began in 1999. The
offset obligation contains two interim milestones, which, if not met, could
increase the total obligation by 10% per milestone. The first milestone occurs
in February 2001 and has been met. It is expected that the second milestone will
be met as well. In addition, the agreement contains a penalty of 5% of the total
obligation if it is not met by the end of the seven-year period. The Corporation
expects to fully comply with its obligations under this agreement.
40 Curtiss-Wright Corporation and Subsidiaries
corporate directory
Directors
Martin R. Benante
Chairman and Chief Executive Officer
Admiral James B. Busey IV
Admiral, U.S. Navy (Ret.)
Former President and Chief Executive Officer of AFCEA International
Aviation Safety and Security Consultant
S. Marce Fuller
President and Chief Executive Officer of Mirant Corporation, Inc.
(formerly known as Southern Energy, Inc.)
David Lasky
Director, Primex Technologies, Inc.
Former Chairman and Chief Executive Officer
of Curtiss-Wright Corporation
William B. Mitchell
Director, Mitre Corporation
Former Vice-Chairman of Texas Instruments Inc.
John R. Myers
Chairman of Tru-Circle Corporation
Management Consultant
Former Chairman of the Board of Garrett Aviation Services
Dr. William W. Sihler
Ronald E. Trzcinski Professor of Business Administration
Darden Graduate School of Business Administration
University of Virginia
J. McLain Stewart
Former Director, McKinsey & Co. Management Consultants
Officers
Martin R. Benante
Chairman and Chief Executive Officer
Gerald Nachman
Executive Vice President
George J. Yohrling
Vice President
Joseph Napoleon
Vice President
Robert A. Bosi
Vice President--Finance
Brian D. O'Neill
Secretary and General Counsel
Gary J. Benschip
Treasurer
Glenn E. Tynan
Controller
Gary R. Struening
Assistant Controller
James V. Maher
Assistant Secretary
Curtiss-Wright Corporation and Subsidiaries 41
corporate information
Corporate Headquarters
1200 Wall Street West, Lyndhurst, New Jersey 07071
Tel. (201) 896-8400 Fax. (201) 438-5680
Annual Meeting
The 2001 annual meeting of stockholders will be held on May 4, 2001, at 2:00
p.m., at the Renaissance Meadowlands Hotel, 801 Rutherford Avenue, Rutherford,
New Jersey.
Stock Exchange Listing
The Corporation's common stock is listed and traded on the New York Stock
Exchange. The stock transfer symbol is CW.
Common Stockholders
As of December 31, 2000, the approximate number of holders of record of common
stock, par value $1.00 per share, of the Corporation was 3,602.
Stock Transfer Agent and Registrar
For services such as changes of address, replacement of lost certificates or
dividend checks, and changes in registered ownership, or for inquiries as to
account status, write to Mellon Investor Services LLC, at the following
addresses:
Stockholder Inquiries/Address Changes/Consolidations
P.O. Box 3315, South Hackensack, NJ 07606
Duplicate Mailings
If you receive duplicate mailings because of slight differences in the
registration of your accounts and wish to eliminate the duplication, please call
Mellon's toll-free number, (800) 416-3743, or write to Mellon Investor Services
LLC, 85 Challenger Road, Ridgefield Park, NJ 07660 for instructions on combining
your accounts.
Direct Stock Purchase Plan/Dividend Reinvestment Plan
A plan is available to purchase or sell shares of Curtiss-Wright that provides a
low cost alternative to the traditional methods of buying, holding, and selling
stock. The plan also provides for the automatic reinvestment of Curtiss-Wright
dividends. For more information contact our transfer agent, Mellon Investor
Services LLC, toll-free at (888) 266-6793.
Lost Certificates/Certificate Replacement
Estoppel Department, P.O. Box 3317,
South Hackensack, NJ 07606
Certificate Transfers
Stock Transfer Department, P.O. Box 3312,
South Hackensack, NJ 07606
Please include your name, address, and telephone number with all correspondence.
Telephone inquiries may be made to (800) 416-3743. Foreign: (201) 329-8660.
Domestic hearing-impaired: (800) 231-5469. Foreign hearing-impaired: (201)
329-8354. Internet inquiries should be addressed to
http://www.mellon-investor.com.
Investor Information
Investors, stockbrokers, security analysts, and others seeking information about
Curtiss-Wright Corporation should contact Robert A. Bosi, Vice
President--Finance, or Gary J. Benschip, Treasurer, at the Corporate
Headquarters; telephone (201) 896-1751.
Internet Address
Use http://www.curtisswright.com to reach the Curtiss-Wright home page for
information about Curtiss-Wright.
Financial Reports
This Annual Report includes most of the periodic financial information required
to be on file with the Securities and Exchange Commission. The Company also
files an Annual Report on Form 10-K, a copy to which may be obtained free of
charge. These reports, as well as additional financial documents such as
quarterly shareholder reports, proxy statements, and quarterly reports on Form
10-Q, may be obtained by written request to Gary J. Benschip, Treasurer, at
Corporate Headquarters.
Common Stock Price Range
- --------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------
High Low High Low
- --------------------------------------------------------------------------------
First Quarter $40.3125 $35.0000 $40.6250 $31.0000
Second Quarter 39.8750 33.4375 39.0625 31.1875
Third Quarter 48.3750 36.5000 38.8750 30.3750
Fourth Quarter 51.1250 43.3750 38.6250 31.5000
- --------------------------------------------------------------------------------
Dividends
- --------------------------------------------------------------------------------
2000 1999
- --------------------------------------------------------------------------------
First Quarter $0.130 $0.130
Second Quarter $0.130 $0.130
Third Quarter $0.130 $0.130
Fourth Quarter $0.130 $0.130
- --------------------------------------------------------------------------------
42 Curtiss-Wright Corporation and Subsidiaries