UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2018

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________ to _______

Commission File Number 1-134

CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)

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

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

(704) 869-4600
(Registrant’s telephone number, including area code)

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

Yes   ý                         No   o

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

Yes   ý                         No   o

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

			
Large accelerated filer ý	 	Accelerated filer o	
Non-accelerated filer o	(Do not check if a smaller reporting company)	Smaller reporting company o	
 	 	Emerging growth company o
	
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o	

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

Yes   o    No   ý

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

Common Stock, par value $1.00 per share:  43,981,463 shares (as of June 30, 2018 ).

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

TABLE of CONTENTS

	
				
PART I – FINANCIAL INFORMATION	PAGE	

Item 1.	Financial Statements (Unaudited):	 	
 	 	 	 	
 	 	Condensed Consolidated Statements of Earnings	4	
 	 	 	 	
 	 	Condensed Consolidated Statements of Comprehensive Income	5	
 	 	 	 	
 	 	Condensed Consolidated Balance Sheets	6	
 	 	 	 	
 	 	Condensed Consolidated Statements of Cash Flows	7	
 	 	 	 	
 	 	Condensed Consolidated Statements of Stockholders’ Equity	8	
 	 	 	 	
 	 	Notes to Condensed Consolidated Financial Statements	9	
 	 	 	 	
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22	
 	 	 	 	
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32	
 	 	 	 	
Item 4.	Controls and Procedures	32	

PART II – OTHER INFORMATION	 	

Item 1.	Legal Proceedings	33	
 	 	 	 	
Item 1A.	Risk Factors	33	
 	 	 	 	
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33	
 	 	 	
Item 3.	Defaults upon Senior Securities	34	
 	 	 	
Item 4.	Mine Safety Disclosures	34	
 	 	 	
Item 5.	Other Information	34	
 	 	 	 	
Item 6.	Exhibits	35	
 	 	 	 	
Signatures	 	36	

Page 3

PART 1- FINANCIAL INFORMATION
Item 1. Financial Statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)

																
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
(In thousands, except per share data)	2018	 	2017	 	2018	 	2017	
Net sales	 	 	 	 	 	 	 	
Product sales	$	511,676		 	$	459,774		 	$	956,363		 	$	883,003		
Service sales	108,622		 	107,879		 	211,457		 	208,241		
Total net sales	620,298		 	567,653		 	1,167,820		 	1,091,244		
Cost of sales	 	 	 	 	 	 	 	
Cost of product sales	324,184		 	302,794		 	623,495		 	592,404		
Cost of service sales	69,614		 	69,849		 	136,634		 	136,895		
Total cost of sales	393,798		 	372,643		 	760,129		 	729,299		
Gross profit	226,500		 	195,010		 	407,691		 	361,945		
Research and development expenses	15,054		 	15,788		 	30,995		 	31,379		
Selling expenses	32,665		 	29,055		 	64,185		 	58,513		
General and administrative expenses	76,705		 	70,435		 	145,937		 	144,629		
Operating income	102,076		 	79,732		 	166,574		 	127,424		
Interest expense	9,566		 	10,750		 	17,770		 	21,127		
Other income, net	3,971		 	3,729		 	8,654		 	7,576		
Earnings before income taxes	96,481		 	72,711		 	157,458		 	113,873		
Provision for income taxes	(21,693	)	 	(22,061	)	 	(39,027	)	 	(30,676	)	
Net earnings	$	74,788		 	$	50,650		 	$	118,431		 	$	83,197		
 	 	 	 	 	 	 	 	
Net earnings per share:	 	 	 	 	 	 	 	
Basic earnings per share	$	1.69		 	$	1.15		 	$	2.68		 	$	1.88		
Diluted earnings per share	$	1.68		 	$	1.13		 	$	2.66		 	$	1.86		
 	 	 	 	 	 	 	 	
Dividends per share	0.15		 	0.13		 	0.30		 	0.26		
Weighted-average shares outstanding:	 	 	 	 	 	 	 	
Basic	44,124		 	44,213		 	44,144		 	44,221		
Diluted	44,553		 	44,807		 	44,604		 	44,825		
 	 	 	 	 	 	 	 	
See notes to condensed consolidated financial statements	

Page 4

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(In thousands)

	
																
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
 	2018	 	2017	 	2018	 	2017	
Net earnings	$	74,788		 	$	50,650		 	$	118,431		 	$	83,197		
Other comprehensive income (loss)	 	 	 	 	 	 	 	
Foreign currency translation adjustments, net of tax (1)	$	(43,771	)	 	$	32,677		 	$	(28,360	)	 	$	43,901		
Pension and postretirement adjustments, net of tax (2)	3,062		 	1,743		 	5,684		 	3,694		
Other comprehensive income (loss), net of tax	(40,709	)	 	34,420		 	(22,676	)	 	47,595		
Comprehensive income	$	34,079		 	$	85,070		 	$	95,755		 	$	130,792		

(1) The tax benefit included in other comprehensive loss for foreign currency translation adjustments for the three and six months ended June 30, 2018 was $2.0 million and $1.2 million , respectively. The tax expense included in other comprehensive income for foreign currency translation adjustments for the three and six months ended June 30, 2017 was $1.1 million and $1.2 million , respectively.

(2) The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2018 was $0.9 million and $1.8 million , respectively. The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2017 was $1.2 million and $2.5 million , respectively.

See notes to condensed consolidated financial statements

Page 5

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except per share data)

	
								
 	June 30,
2018	 	December 31,
2017	
Assets	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	218,898		 	$	475,120		
Receivables, net	575,142		 	494,923		
Inventories, net	436,250		 	378,866		
Other current assets	53,953		 	52,951		
Total current assets	1,284,243		 	1,401,860		
Property, plant, and equipment, net	374,995		 	390,235		
Goodwill	1,103,562		 	1,096,329		
Other intangible assets, net	449,096		 	329,668		
Other assets	18,292		 	18,229		
Total assets	$	3,230,188		 	$	3,236,321		
Liabilities	 		 	 		
Current liabilities:	 	 	 	
Current portion of long-term and short-term debt	$	959		 	$	150		
Accounts payable	179,566		 	185,176		
Accrued expenses	131,263		 	150,406		
Income taxes payable	4,957		 	4,564		
Deferred revenue	231,187		 	214,891		
Other current liabilities	47,752		 	35,810		
Total current liabilities	595,684		 	590,997		
Long-term debt	813,150		 	813,989		
Deferred tax liabilities, net	56,143		 	49,360		
Accrued pension and other postretirement benefit costs	65,698		 	121,043		
Long-term portion of environmental reserves	14,757		 	14,546		
Other liabilities	108,660		 	118,586		
Total liabilities	1,654,092		 	1,708,521		
Contingencies and commitments (Note 13)			 			
Stockholders’ equity	 	 	 	
Common stock, $1 par value,100,000,000 shares authorized as of June 30, 2018 and December 31, 2017; 49,187,378 shares issued as of June 30, 2018 and December 31, 2017; outstanding shares were 43,981,463 as of June 30, 2018 and 44,123,519 as of December 31, 2017	49,187		 	49,187		
Additional paid in capital	119,025		 	120,609		
Retained earnings	2,047,250		 	1,944,324		
Accumulated other comprehensive loss	(239,516	)	 	(216,840	)	
Common treasury stock, at cost (5,205,915 shares as of June 30, 2018 and 5,063,859 shares as of December 31, 2017)	(399,850	)	 	(369,480	)	
Total stockholders’ equity	1,576,096		 	1,527,800		
Total liabilities and stockholders’ equity	$	3,230,188		 	$	3,236,321		
 	 	 	 	
See notes to condensed consolidated financial statements	

Page 6

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

								
 	Six Months Ended	
 	June 30,	
(In thousands)	2018	 	2017	
Cash flows from operating activities:	 	 	 	
Net earnings	$	118,431		 	$	83,197		
Adjustments to reconcile net earnings to net cash provided by operating activities	 	 	 	
Depreciation and amortization	51,257		 	49,961		
Gain on divestitures	(2,149	)	 	—		
Gain on fixed asset disposals	(897	)	 	(197	)	
Deferred income taxes	5,554		 	(1,750	)	
Share-based compensation	7,801		 	6,016		
Change in operating assets and liabilities, net of businesses acquired and divested:	 	 	 	
Receivables, net	(57,522	)	 	(27,246	)	
Inventories, net	(43,625	)	 	534		
Progress payments	6,718		 	(1,316	)	
Accounts payable and accrued expenses	(38,621	)	 	(48,229	)	
Deferred revenue	17,865		 	11,171		
Income taxes payable	(7,712	)	 	(13,217	)	
Pension and postretirement liabilities, net	(48,265	)	 	1,041		
Other current and long-term assets and liabilities	17,850		 	967		
Net cash provided by operating activities	26,685		 	60,932		
Cash flows from investing activities:	 	 	 	
Proceeds from sales and disposals of long lived assets	4,328		 	349		
Consideration from divestitures	(268	)	 	—		
Acquisition of intangible assets	(1,500	)	 	—		
Additions to property, plant, and equipment	(19,852	)	 	(23,288	)	
Acquisition of businesses, net of cash acquired	(212,737	)	 	(232,630	)	
Additional consideration paid on prior year acquisitions	(460	)	 	—		
Net cash used for investing activities	(230,489	)	 	(255,569	)	
Cash flows from financing activities:	 	 	 	
Borrowings under revolving credit facility	367,762		 	2,736		
Payment of revolving credit facility	(366,953	)	 	(2,584	)	
Repurchases of common stock	(46,115	)	 	(26,454	)	
Proceeds from share-based compensation	6,360		 	5,374		
Dividends paid	(6,623	)	 	(5,757	)	
Other	(365	)	 	(336	)	
Net cash used for financing activities	(45,934	)	 	(27,021	)	
Effect of exchange-rate changes on cash	(6,484	)	 	10,521		
Net decrease in cash and cash equivalents	(256,222	)	 	(211,137	)	
Cash and cash equivalents at beginning of period	475,120		 	553,848		
Cash and cash equivalents at end of period	$	218,898		 	$	342,711		
Supplemental disclosure of non-cash activities:	 		 	 		
Capital expenditures incurred but not yet paid	$	425		 	$	1,641		
See notes to condensed consolidated financial statements	

Page 7

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
(In thousands)

	
																				
 	Common Stock	 	Additional Paid in Capital	 	Retained Earnings	 	Accumulated Other Comprehensive Income (Loss)	 	Treasury Stock	
December 31, 2016	$	49,187		 	$	129,483		 	$	1,754,907		 	$	(291,756	)	 	$	(350,630	)	
Net earnings	—		 	—		 	214,891		 	—		 	—		
Other comprehensive loss, net of tax	—		 	—		 	—		 	74,916		 	—		
Dividends paid	—		 	—		 	(24,740	)	 	—		 	—		
Restricted stock	—		 	(12,104	)	 	—		 	—		 	12,105		
Stock options exercised	—		 	(5,724	)	 	—		 	—		 	19,902		
Share-based compensation	—		 	11,191		 			 	—		 	381		
Repurchase of common stock	—		 	—		 	—		 	—		 	(52,127	)	
Other	—		 	(2,237	)	 	(734	)	 	—		 	889		
December 31, 2017	$	49,187		 	$	120,609		 	$	1,944,324		 	$	(216,840	)	 	$	(369,480	)	
Cumulative effect from adoption of ASC 606	—		 	—		 	(2,274	)	 	—		 	—		
Net earnings	—		 	—		 	118,431		 	—		 	—		
Other comprehensive income, net of tax	—		 	—		 	—		 	(22,676	)	 	—		
Dividends declared	—		 	—		 	(13,231	)	 	—		 	—		
Restricted stock	—		 	(6,923	)	 	—		 	—		 	6,923		
Stock options exercised	—		 	(1,535	)	 	—		 	—		 	7,896		
Share-based compensation	—		 	7,599		 	—		 	—		 	201		
Repurchase of common stock	—		 	—		 	—		 	—		 	(46,115	)	
Other	—		 	(725	)	 	—		 	—		 	725		
June 30, 2018	$	49,187		 	$	119,025		 	$	2,047,250		 	$	(239,516	)	 	$	(399,850	)	
 	 	 	 	 	 	 	 	 	 	
See notes to condensed consolidated financial statements	

Page 8

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1 .           BASIS OF PRESENTATION

Curtiss-Wright Corporation and its subsidiaries (the "Corporation" or the "Company") is a global, diversified manufacturing and service company that designs, manufactures, and overhauls precision components and provides highly engineered products and services to the aerospace, defense, power generation, and general industrial markets.

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

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

Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete long-term contracts under the percentage-of-completion accounting methods, the estimate of useful lives for property, plant, and equipment, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2018 and 2017 , there were no significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2017 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

Recent accounting pronouncements adopted

ASU 2014-09 - Revenue from Contracts with Customers - On January 1, 2018, the Corporation adopted ASC 606, Revenue from Contracts with Customers, and the related amendments (“new revenue standard”) using the modified retrospective method. The Corporation recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the retained earnings balance as of January 1, 2018. Comparative information for prior periods has not been restated and continues to be reported under the accounting standard in effect for those respective periods.

The cumulative effect from the adoption of the new revenue standard as of January 1, 2018 was as follows:

	
												
Balance Sheet  (In thousands)	As of
December 31, 2017	 	Adjustments due to
ASU 2014-09	 	As of
January 1, 2018	
Receivables, net	$	494,923		 	$	18,363		 	$	513,286		
Inventories, net	378,866		 	(23,555	)	 	355,311		
Other assets	18,229		 	878		 	19,107		
Deferred revenue	214,891		 	(2,040	)	 	212,851		
Retained earnings	1,944,324		 	(2,274	)	 	1,942,050		

The impact of adoption on the Corporation's Condensed Consolidated Statement of Earnings and Condensed Consolidated Balance Sheet was as follows:

Page 9

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

	
												
 	Three Months Ended June 30, 2018	
Statement of Earnings  (In thousands)	As Reported	 	Adjustments
Increase/(Decrease)	 	Balances Without Adoption of ASC 606	
Product sales	$	511,676		 	$	(5,477	)	 	$	506,199		
Cost of product sales	324,184		 	(4,095	)	 	320,089		
Provision for income taxes	(21,693	)	 	371		 	(21,322	)	
Net Income	$	74,788		 	$	(1,011	)	 	$	73,777		

	
												
 	Six Months Ended June 30, 2018	
Statement of Earnings  (In thousands)	As Reported	 	Adjustments
Increase/(Decrease)	 	Balances Without Adoption of ASC 606	
Product sales	$	956,363		 	$	(7,511	)	 	$	948,852		
Cost of product sales	623,495		 	(3,727	)	 	619,768		
Provision for income taxes	(39,027	)	 	986		 	(38,041	)	
Net Income	$	118,431		 	$	(2,798	)	 	$	115,633		

	
												
 	As of June 30, 2018	
Balance Sheet  (In thousands)	As Reported	 	Adjustments
Increase/(Decrease)	 	Balances Without Adoption of ASC 606	
Receivables, net	$	575,142		 	$	(26,158	)	 	$	548,984		
Inventories, net	436,250		 	27,557		 	463,807		
Other assets	18,292		 	(879	)	 	17,413		
Income taxes payable	4,957		 	(983	)	 	3,974		
Deferred revenue	231,187		 	2,029		 	233,216		
Retained earnings	2,047,250		 	(526	)	 	2,046,724		

ASU 2017-07, Retirement Benefits - Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost - On January 1, 2018, the Corporation adopted the amendments to ASC 715 that improve the presentation of net periodic pension and postretirement benefit costs. The Corporation retrospectively adopted the presentation of service cost separate from the other components of net periodic costs and included it as a component of employee compensation cost in operating income. The interest cost, expected return on assets, amortization of prior service costs, and net actuarial gain/loss components of net periodic benefit costs have been reclassified from operating income to other income, net. Additionally, the Corporation elected to apply the practical expedient which allows it to reclassify amounts disclosed previously in Note 15 of the Corporation's 2017 Annual Report on Form 10-K as the basis for applying retrospective presentation for comparative periods.

The effect of the retrospective change on the Corporation's Condensed Consolidated Statement of Earnings for the three and six months ended June 30, 2017 , was as follows:

	
												
 	Three Months Ended June 30, 2017	
Statement of Earnings  (In thousands)	Previously Reported	 	Adjustments
Increase/(Decrease)	 	As Revised	
Cost of product sales	$	299,739		 	$	3,055		 	$	302,794		
Cost of service sales	69,144		 	705		 	69,849		
Research and development expenses	15,501		 	287		 	15,788		
Selling expenses	28,560		 	495		 	29,055		
General and administrative expenses	71,438		 	(1,003	)	 	70,435		
Other income, net	190		 	3,539		 	3,729		

Page 10

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

	
												
 	Six Months Ended June 30, 2017	
Statement of Earnings  (In thousands)	Previously Reported	 	Adjustments
Increase/(Decrease)	 	As Revised	
Cost of product sales	$	586,231		 	$	6,173		 	$	592,404		
Cost of service sales	135,468		 	1,427		 	136,895		
Research and development expenses	30,799		 	580		 	31,379		
Selling expenses	57,513		 	1,000		 	58,513		
General and administrative expenses	146,735		 	(2,106	)	 	144,629		
Other income, net	502		 	7,074		 	7,576		

ASU 2017-01, Business Combinations - Clarifying the Definition of a Business - On January 1, 2018, the Corporation adopted the amendments to ASC 805 which clarify the definition of a business. The standard introduces a screen for determining when assets acquired are not a business and clarifies that a business must include, at a minimum, an input and a substantive process that contribute to an output. The adoption of this standard did not have a material impact on the Condensed Consolidated Financial Statements.

Recent accounting pronouncements to be adopted

			
Standard	Description	Effect on the condensed consolidated financial statements	
ASU 2016-02 Leases	In February 2016, the FASB issued final guidance that will require lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting.	The adoption of this standard is expected to result in an increase of approximately $130 million to $140 million in total assets and total liabilities in the Corporation’s Condensed Consolidated Balance sheet as the Corporation is required to recognize a right-of-use asset and lease liability for all leases greater than 12 months. However, the standard is not expected to have a material impact on the Corporation’s cash flows or results of operations. 

Date of adoption: January 1, 2019			
ASU 2018-02 Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income	In February 2018, the FASB issued ASU 2018-02,  Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This ASU permits the reclassification of tax effects stranded in accumulated other comprehensive income to retained earnings as a result of the 2017 Tax Cuts and Jobs Act (the Tax Act). The standard will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted.
 	The Corporation is currently evaluating the impact of the adoption of this standard on its Condensed Consolidated Financial Statements.	
Date of adoption: January 1, 2019			
ASU 2018-07 Improvements to Nonemployee Share-Based Payment Accounting	In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting . The ASU simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting for share-based payments to employees, with certain exceptions. The standard will be effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted.
	The Corporation does not expect the adoption of this standard to have a material impact on its Condensed Consolidated Financial Statements.
	
Date of adoption: January 1, 2019			

Impact from the Tax Act

In accordance with Staff Bulletin No. 118, Income Tax Implications of the Tax Cuts and Jobs Act , the Corporation recognized the income tax effects of the Tax Act in its consolidated financial statements for the year ended December 31, 2017. During the six months ended June 30, 2018 , the Corporation recorded additional provisional tax expense of $6.5 million for foreign

Page 11

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

withholding taxes associated with the Tax Act. The Corporation expects to finalize any provisional amounts associated with the Tax Act over the next six months based on ongoing assessment of its tax positions and other relevant data.

2 .           REVENUE

As discussed in Note 1, the Corporation accounts for revenues in accordance with ASC 606, Revenue from Contracts with Customers , which was adopted as January 1, 2018 on a modified retrospective basis. Under ASC 606, revenue is recognized when control of a promised good and/or service is transferred to a customer in an amount that reflects the consideration that the Corporation expects to be entitled to in exchange for that good and/or service.

Performance Obligations

The Corporation identifies a performance obligation for each promise in a contract to transfer a distinct good or service to the customer. As part of its assessment, the Corporation considers all goods and/or services promised in the contract, regardless of whether they are explicitly stated or implied by customary business practices. The Corporation’s contracts may contain either a single performance obligation, including the promise to transfer individual goods or services that are not separately distinct within the context of the respective contracts, or multiple performance obligations. For contracts with multiple performance obligations, the Corporation allocates the overall transaction price to each performance obligation using standalone selling prices, where available, or utilizes estimates for each distinct good or service in the contract where standalone prices are not available.

The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Revenue recognized on an over-time basis for both the three months and six months ended June 30, 2018 accounted for approximately 31% of total net sales. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Revenue recognized at a point-in-time for both the three months and six months ended June 30, 2018 accounted for approximately 69% of total net sales. Revenue for these types of arrangements is recognized at the point in time in which control is transferred to the customer, typically based upon the terms of delivery.

Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $2.2 billion as of June 30, 2018 , of which the Corporation expects to recognize approximately 86% as net sales over the next 12 -36 months . The remainder will be recognized thereafter.

Disaggregation of Revenue

The following table presents the Corporation’s total net sales disaggregated by end market and customer type:

																
Total Net Sales by End Market and Customer Type	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
(In thousands)	2018	 	2017	 	2018	 	2017	
Defense	 	 	 	 	 	 	 	
Aerospace	$	98,268		 	$	89,367		 	$	174,209		 	$	154,661		
Ground	20,272		 	17,515		 	42,282		 	37,251		
Naval	132,005		 	100,048		 	234,786		 	191,018		
Other	3,422		 	5,964		 	8,004		 	13,006		
Total Defense Customers	$	253,967		 	$	212,894		 	$	459,281		 	$	395,936		
 	 	 	 	 	 	 	 	
Commercial	 	 	 	 	 	 	 	
Aerospace	$	104,617		 	$	100,353		 	$	204,021		 	$	198,966		
Power Generation	102,075		 	114,773		 	201,087		 	220,324		
General Industrial	159,639		 	139,633		 	303,431		 	276,018		
Total Commercial Customers	$	366,331		 	$	354,759		 	$	708,539		 	$	695,308		
 	 	 	 	 	 	 	 	
Total	$	620,298		 	$	567,653		 	$	1,167,820		 	$	1,091,244		

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Contract Balances

Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the six months ended June 30, 2018 included in the contract liabilities balance at the beginning of the year was approximately $113 million . Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

3 .           ACQUISITIONS

The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets.  The Corporation has completed a number of acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements.  This goodwill arises because the acquisition purchase price reflects the future earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition.  Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

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

During the six months ended June 30, 2018 , the Corporation acquired one business for an aggregate purchase price of $213 million , which is described in more detail below. During the six months ended June 30, 2017 , the Corporation acquired two businesses for an aggregate purchase price of $233 million , which are described in more detail below.

The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2018 includes $22 million of total net sales and $3 million of net losses from the Corporation's 2018 acquisition. The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2017 includes $25 million of total net sales and $4 million of net losses from the Corporation's 2017 acquisitions.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the six months ended June 30, 2018 and 2017 .

	
									
(In thousands)	 	2018	 	2017	
Accounts receivable	 	$	8,143		 	$	5,020		
Inventory	 	49,508		 	22,702		
Property, plant, and equipment	 	3,203		 	4,598		
Other current and non-current assets	 	47		 	2,815		
Intangible assets	 	141,100		 	88,900		
Current and non-current liabilities	 	(6,734	)	 	(7,163	)	
Due to seller, net	 	—		 	(509	)	
Net tangible and intangible assets	 	195,267		 	116,363		
Purchase price, net of cash acquired	 	212,737		 	232,630		
Goodwill	 	$	17,470		 	$	116,267		
 	 	 	 	 	
Goodwill deductible for tax purposes	 	$	17,470		 	$	116,267		

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

2018 Acquisitions

Dresser-Rand Government Business (DRG)

On April 2, 2018 , the Corporation acquired certain assets and assumed certain liabilities of DRG for $212.7 million in cash. The Asset Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type. DRG is a designer and manufacturer of mission-critical, high-speed rotating equipment solutions and also acts as the sole supplier of steam turbines and main engine guard valves on all aircraft carrier programs. The acquired business operates within the Corporation's Power segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

2017 Acquisitions

Teletronics Technology Corporation (TTC)

On January 3, 2017 , the Corporation acquired 100% of the issued and outstanding capital stock of TTC for $226.0 million , net of cash acquired. The Share Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited in escrow as security for potential indemnification claims against the seller. TTC is a designer and manufacturer of high-technology data acquisition and comprehensive flight test instrumentation systems for critical aerospace and defense applications. The acquired business operates within the Defense segment.

Para Tech Coating, Inc. (Para Tech)

On February 8, 2017 , the Corporation acquired certain assets and assumed certain liabilities of Para Tech for $6.6 million in cash. The Asset Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price held back as security for potential indemnification claims against the seller. Para Tech is a provider of parylene conformal coating services for aerospace & defense electronic components as well as critical medical devices. The acquired business operates within the Commercial/Industrial segment.

4 .           RECEIVABLES

Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables.  Substantially all amounts of unbilled receivables are expected to be billed and collected within one year. An immaterial amount of unbilled receivables are subject to retainage provisions. The amount of claims and unapproved change orders within our receivables balances are immaterial.

The composition of receivables is as follows:

								
(In thousands)	June 30, 2018	 	December 31, 2017	
Billed receivables:	 	 	 	
Trade and other receivables	$	389,249		 	$	363,234		
Less: Allowance for doubtful accounts	(9,039	)	 	(7,486	)	
Net billed receivables	380,210		 	355,748		
Unbilled receivables (Contract Assets):	 	 	 	
Recoverable costs and estimated earnings not billed	215,895		 	160,727		
Less: Progress payments applied	(20,963	)	 	(21,552	)	
Net unbilled receivables	194,932		 	139,175		
Receivables, net	$	575,142		 	$	494,923		

5 .           INVENTORIES

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Inventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year. Long-term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost or market.

The composition of inventories is as follows:

								
(In thousands)	June 30, 2018	 	December 31, 2017	
Raw materials	$	213,306		 	$	191,855		
Work-in-process	97,420		 	73,937		
Finished goods	152,915		 	114,307		
Inventoried costs related to U.S. Government and other long-term contracts	51,733		 	65,150		
Gross inventories	515,374		 	445,249		
Less:  Inventory reserves	(60,383	)	 	(54,638	)	
Progress payments applied, principally related to long-term contracts	(18,741	)	 	(11,745	)	
Inventories, net	$	436,250		 	$	378,866		

Inventoried costs related to long-term contracts include capitalized contract development costs related to certain aerospace and defense programs of $45.3 million and $35.0 million as of June 30, 2018 and December 31, 2017 , respectively. These capitalized costs will be liquidated as units are produced.  As of June 30, 2018 and December 31, 2017 , $19.6 million and $5.4 million , respectively, are scheduled to be liquidated under existing firm orders.

6 .           GOODWILL

The changes in the carrying amount of goodwill for the six months ended June 30, 2018 are as follows:

																
(In thousands)	Commercial/Industrial	 	Defense	 	Power	 	Consolidated	
December 31, 2017	$	448,531		 	$	460,332		 	$	187,466		 	$	1,096,329		
Acquisitions	—		 	—		 	17,470		 	17,470		
Adjustments	—		 	(1,594	)	 	—		 	(1,594	)	
Foreign currency translation adjustment	(3,224	)	 	(5,283	)	 	(136	)	 	(8,643	)	
June 30, 2018	$	445,307		 	$	453,455		 	$	204,800		 	$	1,103,562		

7 .           OTHER INTANGIBLE ASSETS, NET
 
The following tables present the cumulative composition of the Corporation’s intangible assets:

																									
 	 	June 30, 2018	 	December 31, 2017	
(In thousands)	 	Gross	 	Accumulated Amortization	 	Net	 	Gross	 	Accumulated Amortization	 	Net	
Technology	 	$	240,101		 	$	(118,477	)	 	$	121,624		 	$	243,440		 	$	(114,036	)	 	$	129,404		
Customer related intangibles	 	362,015		 	(185,281	)	 	176,734		 	367,230		 	(180,580	)	 	186,650		
Programs (1)	 	139,000		 	(1,738	)	 	137,262		 	—		 	—		 	—		
Other intangible assets	 	42,114		 	(28,638	)	 	13,476		 	40,640		 	(27,026	)	 	13,614		
Total	 	$	783,230		 	$	(334,134	)	 	$	449,096		 	$	651,310		 	$	(321,642	)	 	$	329,668		
 	 	 	 	 	 	 	 	 	 	 	 	 	
(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. 

During the six months ended June 30, 2018 , the Corporation acquired intangible assets of $141.1 million . The Corporation acquired Programs of $139.0 million , Customer-related intangibles of $1.8 million , and Other intangible assets of $0.3 million , which have a weighted average amortization period of 20.0 years, 10.4 years, and 8.0 years, respectively.

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Total intangible amortization expense for the six months ended June 30, 2018 was $21.1 million as compared to $19.1 million in the comparable prior year period.  The estimated amortization expense for the five years ending December 31, 2018 through 2022 is $43.6 million , $43.5 million , $41.6 million , $39.8 million , and $37.3 million , respectively.

8 .           FAIR VALUE OF FINANCIAL INSTRUMENTS
 
Forward Foreign Exchange and Currency Option Contracts
 
The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada.  The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions.  The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations.  Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.
 
Interest Rate Risks and Related Strategies
 
The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Corporation periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Corporation exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The Corporation’s foreign exchange contracts and interest rate swaps are considered Level 2 instruments which are based on market based inputs or unobservable inputs and corroborated by market data such as quoted prices, interest rates, or yield curves.

Effects on Consolidated Balance Sheets

As of June 30, 2018 and December 31, 2017 , the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings
 
Undesignated hedges

For the three and six months ended June 30, 2018 and 2017, the gains or losses recognized in income on forward exchange derivative contracts not designated for hedge accounting were immaterial.

Debt

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of June 30, 2018 .  Accordingly, all of the Corporation’s debt is valued at a Level 2.  The fair values described below may not be indicative of net realizable value or reflective of future fair values.  Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

	
																
 	June 30, 2018	 	December 31, 2017	
(In thousands)	Carrying Value	 	Estimated Fair Value	 	Carrying Value	 	Estimated Fair Value	
3.84% Senior notes due 2021	100,000		 	100,451		 	100,000		 	102,472		
3.70% Senior notes due 2023	225,000		 	224,066		 	225,000		 	228,783		
3.85% Senior notes due 2025	100,000		 	99,603		 	100,000		 	102,164		
4.24% Senior notes due 2026	200,000		 	202,779		 	200,000		 	208,873		
4.05% Senior notes due 2028	75,000		 	74,636		 	75,000		 	76,997		
4.11% Senior notes due 2028	100,000		 	99,956		 	100,000		 	103,226		
Other debt	959		 	959		 	150		 	150		
Total debt	800,959		 	802,450		 	800,150		 	822,665		
Debt issuance costs, net	(774	)	 	(774	)	 	(831	)	 	(831	)	
Unamortized interest rate swap proceeds	13,924		 	13,924		 	14,820		 	14,820		
Total debt, net	$	814,109		 	$	815,600		 	$	814,139		 	$	836,654		

9 .           PENSION PLANS

The following tables are consolidated disclosures of all domestic and foreign defined pension plans as described in the Corporation’s 2017 Annual Report on Form 10-K.  

Pension Plans

The components of net periodic pension cost for the three and six months ended June 30, 2018 and 2017 were as follows:

	
																
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	2018	 	2017	
Service cost	$	6,495		 	$	6,474		 	$	13,001		 	$	12,945		
Interest cost	6,521		 	6,236		 	13,055		 	12,455		
Expected return on plan assets	(14,695	)	 	(13,310	)	 	(29,411	)	 	(26,595	)	
Amortization of prior service cost	(62	)	 	(26	)	 	(125	)	 	(51	)	
Amortization of unrecognized actuarial loss	3,903		 	3,585		 	7,809		 	7,166		
Net periodic benefit cost	$	2,162			$	2,959			$	4,329			$	5,920		

During the six months ended June 30, 2018 , the Corporation made a $50 million contribution to the Curtiss-Wright Pension Plan, and does not expect to make any further contributions in 2018 . Contributions to the foreign benefit plans are not expected to be material in 2018 .

Defined Contribution Retirement Plan

Effective January 1, 2014 , all non-union employees who were not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation’s sponsored 401(k) plan. The employer contributions include both employer match and non-elective contribution components, up to a maximum employer contribution of 6% of eligible compensation. During the six months ended June 30, 2018 and 2017 , the expense relating to the plan was $7.4 million and $6.8 million , respectively. The Corporation made $10.8 million in contributions to the plan during the six months ended June 30, 2018 , and expects to make total contributions of $14.0 million in 2018 .

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

	
												
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	2018	 	2017	
Basic weighted-average shares outstanding	44,124		 	44,213		 	44,144		 	44,221		
Dilutive effect of stock options and deferred stock compensation	429		 	594		 	460		 	604		
Diluted weighted-average shares outstanding	44,553		 	44,807		 	44,604		 	44,825		

For the three and six months ended June 30, 2018 , there were no anti-dilutive equity-based awards. For the three and six months ended June 30, 2017 , approximately 38,000 shares issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period.

11 .           SEGMENT INFORMATION
 
The Corporation manages and evaluates its operations based on end markets to strengthen its ability to service customers and recognize certain organizational efficiencies. Based on this approach, the Corporation has three reportable segments: Commercial/Industrial, Defense, and Power.

The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.
Net sales and operating income by reportable segment were as follows:

																
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	2018	 	2017	
Net sales	 	 	 	 	 	 	 	
Commercial/Industrial	$	312,605		 	$	291,856		 	$	609,358		 	$	570,912		
Defense	148,085		 	127,399		 	268,968		 	242,236		
Power	162,049		 	149,970		 	294,207		 	280,565		
Less: Intersegment revenues	(2,441	)	 	(1,572	)	 	(4,713	)	 	(2,469	)	
Total consolidated	$	620,298		 	$	567,653		 	$	1,167,820		 	$	1,091,244		
 	 	 	 	 	 	 	 	
Operating income (expense)	 	 	 	 	 	 	 	
Commercial/Industrial	$	51,736		 	$	43,620		 	$	90,961		 	$	74,172		
Defense	38,641		 	21,128		 	58,369		 	32,225		
Power	19,201		 	23,875		 	34,543		 	39,420		
Corporate and eliminations (1)	(7,502	)	 	(8,891	)	 	(17,299	)	 	(18,393	)	
Total consolidated	$	102,076		 	$	79,732		 	$	166,574		 	$	127,424		

(1) Corporate and eliminations includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.
 
Adjustments to reconcile operating income to earnings before income taxes are as follows:

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

	
																
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	2018	 	2017	
Total operating income	$	102,076		 	$	79,732		 	$	166,574		 	$	127,424		
Interest expense	9,566		 	10,750		 	17,770		 	21,127		
Other income, net	3,971		 	3,729		 	8,654		 	7,576		
Earnings before income taxes	$	96,481		 	$	72,711		 	$	157,458		 	$	113,873		

	
								
(In thousands)	June 30, 2018	 	December 31, 2017	
Identifiable assets	 	 	 	
Commercial/Industrial	$	1,425,220		 	$	1,444,097		
Defense	988,651		 	1,044,776		
Power	709,066		 	482,753		
Corporate and Other	107,251		 	264,695		
Total consolidated	$	3,230,188		 	$	3,236,321		

12 .           ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:

	
												
(In thousands)	Foreign currency translation adjustments, net	 	Total pension and postretirement adjustments, net	 	Accumulated other comprehensive income (loss)	
December 31, 2016	$	(172,650	)	 	$	(119,106	)	 	$	(291,756	)	
Other comprehensive income (loss) before reclassifications  (1)	77,942		 	(10,831	)	 	67,111		
Amounts reclassified from accumulated other comprehensive loss (1)	—		 	7,805		 	7,805		
Net current period other comprehensive loss	77,942		 	(3,026	)	 	74,916		
December 31, 2017	$	(94,708	)	 	$	(122,132	)	 	$	(216,840	)	
Other comprehensive income (loss) before reclassifications (1)	(28,360	)	 	151		 	(28,209	)	
Amounts reclassified from accumulated other comprehensive income (loss) (1)	—		 	5,533		 	5,533		
Net current period other comprehensive income (loss)	(28,360	)	 	5,684		 	(22,676	)	
June 30, 2018	$	(123,068	)	 	$	(116,448	)	 	$	(239,516	)	

(1)	All amounts are after tax.	

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

	
						
(In thousands)	Amount reclassified from AOCI	 	Affected line item in the statement where net earnings is presented	
Defined benefit pension and other postretirement benefit plans	 	 	 	
Amortization of prior service costs	454		 	(1)	
Amortization of actuarial losses	(7,795	)	 	(1)	
 	(7,341	)	 	Total before tax	
 	1,808		 	Income tax	
Total reclassifications	$	(5,533	)	 	Net of tax	

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

		
(1)	These items are included in the computation of net periodic benefit cost.  See Note 9 , Pension and Other Postretirement Benefit Plans .	

13 .           CONTINGENCIES AND COMMITMENTS

Legal Proceedings

The Corporation has been named in a number of lawsuits that allege injury from exposure to asbestos.  To date, the Corporation has not been found liable for or paid any material sum of money in settlement in any case.  The Corporation believes its minimal use of asbestos in its past operations and the relatively non-friable condition of asbestos in its products makes it unlikely that it will face material liability in any asbestos litigation, whether individually or in the aggregate.  The Corporation maintains insurance coverage for these potential liabilities and believes adequate coverage exists to cover any unanticipated asbestos liability.

In December 2013, the Corporation, along with other unaffiliated parties, received a claim from Canadian Natural Resources Limited (CNRL) filed in the Court of Queen's Bench of Alberta, Judicial District of Calgary. The claim pertains to a January 2011 fire and explosion at a delayed coker unit at its Fort McMurray refinery that resulted in the injury of five CNRL employees, damage to property and equipment, and various forms of consequential loss, such as loss of profit, lost opportunities, and business interruption. The fire and explosion occurred when a CNRL employee bypassed certain safety controls and opened an operating coker unit. The total quantum of alleged damages arising from the incident has not been finalized, but is estimated to meet or exceed $1 billion .  The Corporation maintains various forms of commercial, property and casualty, product liability, and other forms of insurance; however, such insurance may not be adequate to cover the costs associated with a judgment against us. In October 2017, all parties agreed in principle to participate in a formal mediation in late 2018 with the intention of settling this claim. In an effort to induce the parties to participate in the formal mediation, CNRL agreed to reduce its claim to approximately  $400 million , which reflects the monetary amount of property damage incurred as a result of the fire and explosion. The Corporation is currently unable to estimate an amount, or range of potential losses, if any, from this matter. The Corporation believes that it has adequate legal defenses and intends to defend this matter vigorously. The Corporation's financial condition, results of operations, and cash flows could be materially affected during a future fiscal quarter or fiscal year by unfavorable developments or outcome regarding this claim.

In addition to the CNRL litigation, the Corporation is party to a number of other legal actions and claims, none of which individually or in the aggregate, in the opinion of management, are expected to have a material effect on the Corporation’s results of operations or financial position.

Westinghouse Bankruptcy

On March 29, 2017, WEC filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York (the Court), Case No. 17-10751.  The Court overseeing the Bankruptcy Case approved, on an interim basis, an $800 million Debtor-in-Possession Financing Facility to help WEC finance its business operations during the reorganization process. On January 4, 2018, WEC announced that it had agreed to be acquired by Brookfield Business Partners L.P (Brookfield) for approximately  $4.6 billion , with the acquisition expected to close in the third quarter of 2018. On March 27, 2018, the Court approved the sale to Brookfield. The acquisition is not expected to have a material impact on the Corporation’s financial condition or results of operations as WEC plans to continue operating in the ordinary course of business under existing senior management.

The Corporation has approximately $2.9 million in pre-petition billings outstanding with WEC as of June 30, 2018. On March 27, 2018, the Court approved WEC's Plan of Reorganization, whereby the Corporation is expected to recover substantially all of its general unsecured claims inclusive of pre-petition billings. As it relates to post-petition work, the Corporation will continue to honor its executory contracts and expects to collect all amounts due.  The Corporation will continue to monitor and evaluate the status of the WEC bankruptcy for potential impacts on its business.

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. As of June 30, 2018 and December 31, 2017 , there were $19.7 million and $21.3 million of stand-by letters of credit outstanding, respectively, and $14.0 million and $14.6 million of bank

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.  The Corporation has provided this financial assurance in the form of a $56.0 million surety bond.

AP1000 Program

The Electro-Mechanical Division, which is within the Corporation’s Power segment, is the reactor coolant pump (RCP) supplier for the Westinghouse AP1000 nuclear power plants under construction in China and the United States.  The terms of the AP1000 China and United States contracts include liquidated damage penalty provisions for failure to meet contractual delivery dates if the Corporation caused the delay and the delay was not excusable. On October 10, 2013, the Corporation received a letter from Westinghouse stating entitlements to the maximum amount of liquidated damages allowable under the AP1000 China contract from Westinghouse of approximately $25 million . The Corporation would be liable for liquidated damages under the contract if certain contractual delivery dates were not met and if the Corporation was deemed responsible for the delay. As of June 30, 2018 , the Corporation has not met certain contractual delivery dates under its AP 1000 China and U.S. contracts; however there are significant uncertainties as to which parties are responsible for the delays. The Corporation believes it has adequate legal defenses and intends to vigorously defend this matter. Given the uncertainties surrounding the responsibility for the delays, no accrual has been made for this matter as of June 30, 2018 .  As of June 30, 2018 , the range of possible loss is $0 to $31 million for the AP1000 U.S. contract, for a total range of possible loss of $0 to $55.5 million .

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I- ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS
 
Except for historical information, this Quarterly Report on Form 10-Q may be deemed to contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Examples of forward-looking statements include, but are not limited to: (a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance, and (d) statements of assumptions, such as economic conditions underlying other statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy.  No assurance may be given that the future results described by the forward-looking statements will be achieved.  While we believe these forward-looking statements are reasonable, they are only predictions and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, which could cause actual results, performance, or achievement to differ materially from anticipated future results, performance, or achievement expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” of our 2017 Annual Report on Form 10-K, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission.  Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1. Financial Statements and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

COMPANY ORGANIZATION
 
Curtiss-Wright Corporation is a diversified, multinational provider of highly engineered, technologically advanced, value-added products and services to a broad range of industries which are reported through our Commercial/Industrial, Defense, and Power segments. We are positioned as a market leader across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. We provide products and services to a number of global markets and have achieved balanced growth through the successful application of our core competencies in engineering and precision manufacturing. Our overall strategy is to be a balanced and diversified company, less vulnerable to cycles or downturns in any one market, and to establish strong positions in profitable niche markets. Approximately 40% of our 2018 revenues are expected to be generated from defense-related markets.

RESULTS OF OPERATIONS
 
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three and six month periods ended June 30, 2018 . The financial information as of June 30, 2018 should be read in conjunction with the financial statements for the year ended December 31, 2017 contained in our Form 10-K.

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

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

Analytical Definitions

Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. Additionally, the results of operations of divested businesses are removed from the comparable prior year period for purposes of calculating “organic” and “incremental” results. The definition of “organic” excludes the effect of foreign currency translation.

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PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

	
																						
Consolidated Statements of Earnings	 	 	 	 	 	 	
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	% change	 	2018	 	2017	 	% change	
Sales	 	 	 	 	 	 	 	 	 	 	 	
Commercial/Industrial	$	312,463		 	$	291,599		 	7	 %	 	$	609,104		 	$	570,421		 	7	 %	
Defense	146,177		 	126,361		 	16	 %	 	265,078		 	241,023		 	10	 %	
Power	161,658		 	149,693		 	8	 %	 	293,638		 	279,800		 	5	 %	
Total sales	$	620,298		 	$	567,653		 	9	 %	 	$	1,167,820		 	$	1,091,244		 	7	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	 		 	 		 	 		 	 		 	 		 	 		
Commercial/Industrial	$	51,736		 	$	43,620		 	19	 %	 	$	90,961		 	$	74,172		 	23	 %	
Defense	38,641		 	21,128		 	83	 %	 	58,369		 	32,225		 	81	 %	
Power	19,201		 	23,875		 	(20	)%	 	34,543		 	39,420		 	(12	)%	
Corporate and eliminations	(7,502	)	 	(8,891	)	 	16	 %	 	(17,299	)	 	(18,393	)	 	6	 %	
Total operating income	$	102,076		 	$	79,732		 	28	 %	 	$	166,574		 	$	127,424		 	31	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Interest expense	9,566		 	10,750		 	(11	)%	 	17,770		 	21,127		 	(16	)%	
Other income, net	3,971		 	3,729		 	6	 %	 	8,654		 	7,576		 	14	 %	
 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before taxes	96,481		 	72,711		 	33	 %	 	157,458		 	113,873		 	38	 %	
Provision for income taxes	(21,693	)	 	(22,061	)	 	(2	)%	 	(39,027	)	 	(30,676	)	 	27	 %	
Net earnings	$	74,788		 	$	50,650		 	 		 	$	118,431		 	$	83,197		 	 		
 	 	 	 	 	 	 	 	 	 	 	 	
New orders	$	700,104		 	$	548,201		 	28	 %	 	$	1,305,007		 	$	1,192,477		 	9	 %	

Components of sales and operating income increase (decrease):

												
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
 	2018 vs. 2017	 	2018 vs. 2017	
 	Sales	 	Operating Income	 	Sales	 	Operating Income	
Organic	4	%	 	32	%	 	4	%	 	34	%	
Acquisitions	4	%	 	(5	%)	 	2	%	 	(3	%)	
Foreign currency	1	%	 	1	%	 	1	%	 	—	%	
Total	9	%	 	28	%	 	7	%	 	31	%	

Sales for the second quarter of 2018 increased $53 million , or 9% , to $620 million , compared with the prior year period. On a segment basis, sales from the Commercial/Industrial segment, Defense segment, and Power segment increased $21 million , $20 million , and $12 million, respectively.

Sales during the six months ended June 30, 2018 increased $77 million , or 7% , to $1,168 million , compared with the prior year period. On a segment basis, sales from the Commercial/Industrial, Defense and Power segments increased $39 million, $24 million, and $14 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income in the second quarter of 2018 increased $22 million , or 28% , to $102 million , and operating margin increased 250 basis points to 16.5% compared with the same period in 2017 . Operating income during the six months ended June 30, 2018 increased $39 million , or 31% , to $167 million and operating margin increased 260 basis points to 14.3% , compared with the same period in 2017. The increases in operating income and operating margin for each of the respective periods were primarily attributable to higher sales volumes and favorable overhead absorption for industrial vehicle and

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

industrial valve products in the Commercial/Industrial segment, higher sales and favorable overhead absorption, improved profitability due to the absence of first year purchase accounting costs from our TTC acquisition, and favorable contract adjustments in the Defense segment, and the benefits of our ongoing margin improvement initiatives across all segments. These increases were partially offset by declines in the Power segment due to first year purchase accounting costs on the acquisition of the Dresser-Rand government business (DRG), lower production levels on the AP1000 U.S. program, and reduced profitability in the nuclear aftermarket business.

Non-segment operating expense in the second quarter and six months ended June 30, 2018 decreased $1 million , or 16% , to $8 million and $1 million , or 6% , to $17 million , respectively, from the comparable prior year periods. These decreases were primarily due to lower corporate costs.

Interest expense in the second quarter and six months ended June 30, 2018 decreased $1 million, or 11%, to $10 million and $3 million, or 16%, to $18 million , respectively, primarily due to maturation of the $150 million 5.51% Senior Notes which were repaid in full on December 1, 2017.

The effective tax rate of 22.5% for the three months ended June 30, 2018 decreased as compared to an effective tax rate of 30.3% in the prior year period, primarily due to the current period reduction of the U.S. corporate income tax rate from 35% to 21% under the Tax Act.  The effective tax rate of 24.8% for the six months ended June 30, 2018 decreased as compared to an effective tax rate of 26.9% in the prior year period, primarily due to the U.S. corporate income tax rate reduction under the Tax Act. This decrease was partially offset by additional provisional tax expense associated with the Tax Act for foreign withholding taxes as well as the elimination of the Section 199 manufacturers’ deduction.

Comprehensive income in the second quarter of 2018 was $34 million , compared to comprehensive income of $85 million in the prior year period. The change was primarily due to the following:

•	Net earnings increased $24 million , primarily due to the higher operating income discussed above.	
		
•	Foreign currency translation adjustments in the second quarter resulted in a $44 million comprehensive loss, compared to a $33 million comprehensive gain in the prior year period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound, Canadian dollar, and Euro with the prior period comprehensive gain primarily attributed to increases in the British Pound and Euro.	

Comprehensive income for the six months ended June 30, 2018 was $96 million , compared to comprehensive income of $131 million in the prior year period. The change was primarily due to the following:

•	Net earnings increased $35 million , primarily due to the higher operating income discussed above.	
		
•	Foreign currency translation adjustments for the six months ended June 30, 2018 resulted in a $28 million comprehensive loss, compared to a $44 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the Canadian dollar and British Pound with the prior period comprehensive gain primarily attributed to increases in the British Pound, Euro, and Canadian dollar.	

New orders increased $152 million and $113 million during the second quarter and six months ended June 30, 2018 , from the comparable prior year periods. The increase in new orders for each of the respective periods was primarily due to the DRG acquisition in the Power segment and the timing of customer funding in the Defense and Power segments. These increases were partially offset by a decrease in the Commercial/Industrial segment due to the timing of aerospace defense orders and a decline in orders on the Boeing 737 platform.

RESULTS BY BUSINESS SEGMENT

Commercial/Industrial

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

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

	
																						
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	% change	 	2018	 	2017	 	% change	
Sales	$	312,463		 	$	291,599		 	7	%	 	$	609,104		 	$	570,421		 	7	%	
Operating income	51,736		 	43,620		 	19	%	 	90,961		 	74,172		 	23	%	
Operating margin	16.6	%	 	15.0	%	 	160	 bps	 	14.9	%	 	13.0	%	 	190	 bps	
New orders	$	302,537		 	$	315,014		 	(4	%)	 	$	631,815		 	$	642,921		 	(2	%)	

Components of sales and operating income increase (decrease):

												
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
 	2018 vs. 2017	 	2018 vs. 2017	
 	Sales	 	Operating Income	 	Sales	 	Operating Income	
Organic	5	%	 	16	%	 	5	%	 	21	%	
Acquisitions	—	%	 	—	%	 	—	%	 	—	%	
Foreign currency	2	%	 	3	%	 	2	%	 	2	%	
Total	7	%	 	19	%	 	7	%	 	23	%	

Sales in the Commercial/Industrial segment are primarily generated from the commercial aerospace and general industrial markets, and to a lesser extent the defense and power generation markets.

Sales in the second quarter increased $21 million , or 7% , to $312 million from the prior year period. In the general industrial market, sales increased $14 million primarily due to higher demand for our industrial vehicle, industrial controls, and industrial valve products. Aerospace defense sales increased primarily due to higher sales of actuation systems on fighter jets. Sales in the commercial aerospace market were essentially flat as higher sales of sensors and controls products and surface treatment services were more than offset by the timing of FAA directive revenues. Favorable foreign currency translation benefited sales $6 million.
 
Sales during the six months ended June 30, 2018 increased $39 million , or 7% , to $609 million from the prior year period. In the general industrial market, sales increased $18 million primarily due to higher demand for our industrial vehicle, industrial controls, and industrial valve products. Sales in the naval defense market benefited $9 million primarily due to higher production levels on CVN-80 pumps. Aerospace defense sales increased $10 million primarily due to higher sales of actuation systems on fighter jets. Sales in the commercial aerospace market were essentially flat as higher sales of sensors and controls products and surface treatment services were more than offset by the timing of FAA directive revenues. Favorable foreign currency translation benefited sales $13 million.
 
Operating income during the second quarter increased $8 million , or 19% , to $52 million from the prior year period, while operating margin increased 160 basis points to 16.6% . Operating income during the six months ended June 30, 2018 increased $17 million , or 23% , to $91 million from the prior year period, while operating margin increased 190 basis points to 14.9% . The increases in operating income and operating margin for each of the respective periods were primarily due to higher sales volumes and favorable overhead absorption for industrial vehicle and industrial valve products as well as ongoing margin improvement initiatives. These increases were partially offset by lower profitability for actuation system products due to lower volume and unfavorable mix.

New orders decreased $12 million and $11 million during the second quarter and six months ended June 30, 2018 from the comparable prior year periods, as higher demand for industrial vehicle products and surface treatment services was more than offset by the timing of aerospace defense orders and a decline in orders on the Boeing 737 platform.

Defense

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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

																						
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	% change	 	2018	 	2017	 	% change	
Sales	$	146,177		 	$	126,361		 	16	%	 	$	265,078		 	$	241,023		 	10	%	
Operating income	38,641		 	21,128		 	83	%	 	58,369		 	32,225		 	81	%	
Operating margin	26.4	%	 	16.7	%	 	970	 bps	 	22.0	%	 	13.4	%	 	860	 bps	
New orders	$	159,365		 	$	118,048		 	35	%	 	$	293,254		 	$	252,021		 	16	%	

Components of sales and operating income increase (decrease):

												
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
 	2018 vs. 2017	 	2018 vs. 2017	
 	Sales	 	Operating Income	 	Sales	 	Operating Income	
Organic	15	%	 	86	%	 	9	%	 	86	%	
Acquisitions	—	%	 	—	%	 	—	%	 	—	%	
Foreign currency	1	%	 	(3	%)	 	1	%	 	(5	%)	
Total	16	%	 	83	%	 	10	%	 	81	%	

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

Sales in the second quarter increased $20 million , or 16% , to $146 million from the prior year period, primarily due to higher sales in the aerospace defense, naval defense, and commercial aerospace markets of $6 million, $5 million, and $5 million, respectively. The increase in sales in the aerospace defense market was primarily due to higher demand for data acquisition and flight test equipment, partially offset by declines in unmanned aerial vehicle (UAV) production. Sales in the naval defense market benefited primarily due to favorable contract adjustments. Sales in the commercial aerospace market increased primarily due to higher production in our avionics business.
  
Sales during the six months ended June 30, 2018 increased $24 million , or 10% , to $265 million from the prior year period, primarily due to higher sales in the aerospace defense, ground defense, and commercial aerospace markets of $10 million, $5 million, and $7 million, respectively. In the aerospace defense market, we experienced higher demand for data acquisition and flight test equipment, partially offset by lower sales of embedded computing products supporting various Intelligence, Surveillance and Reconnaissance (ISR) programs and declines in UAV production. Sales in the ground defense market benefited primarily due to higher foreign military sales. Sales in the commercial aerospace market increased primarily due to higher production in our avionics business.

Operating income during the second quarter increased $ 18 million , or 83% , to $ 39 million , and operating margin increased 970 basis points from the prior year quarter to 26.4% . Operating income during the six months ended June 30, 2018 increased $26 million , or 81% , to $58 million , and operating margin increased 860 basis points from the prior year period to 22.0% . The increases in operating income and operating margin for each of the respective periods were primarily due to higher sales and favorable overhead absorption, improved profitability as we moved beyond first year purchase accounting costs from our TTC acquisition, favorable contract adjustments within our naval defense business, and the benefits of our ongoing margin improvement initiatives.

New orders increased $41 million during both the second quarter and six months ended June 30, 2018 from the comparable prior year periods, primarily due to the timing of naval defense orders.

Power

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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

																						
 	Three Months Ended	 	Six Months Ended	
(In thousands)	June 30,	 	June 30,	
 	2018	 	2017	 	% change	 	2018	 	2017	 	% change	
Sales	$	161,658		 	$	149,693		 	8	%	 	$	293,638		 	$	279,800		 	5	%	
Operating income	19,201		 	23,875		 	(20	%)	 	34,543		 	39,420		 	(12	%)	
Operating margin	11.9	%	 	15.9	%	 	(400	) bps	 	11.8	%	 	14.1	%	 	(230	) bps	
New orders	$	238,202		 	$	115,139		 	107	%	 	$	379,938		 	$	297,535		 	28	%	

Components of sales and operating income increase (decrease):

												
 	Three Months Ended	 	Six Months Ended	
 	June 30,	 	June 30,	
 	2018 vs. 2017	 	2018 vs. 2017	
 	Sales	 	Operating Income	 	Sales	 	Operating Income	
Organic	(7	%)	 	(3	%)	 	(3	%)	 	(2	%)	
Acquisitions	15	%	 	(17	%)	 	8	%	 	(10	%)	
Foreign currency	—	%	 	—	%	 	—	%	 	—	%	
Total	8	%	 	(20	%)	 	5	%	 	(12	%)	

Sales in the Power segment are primarily to the power generation and naval defense markets.
Sales in the second quarter increased $12 million , or 8% , to $162 million , primarily due to the incremental impact of our DRG acquisition which contributed $22 million in sales. Excluding the impact of DRG, sales in the naval defense market increased $4 million primarily due to higher production levels of CVN-80 pumps. Within the power generation market, sales decreased $16 million primarily due to lower production volumes on the AP1000 U.S. program and lower domestic aftermarket sales supporting currently operating nuclear reactors.

Sales for the six months ended June 30, 2018 increased $14 million , or 5% , to $294 million from the prior year period, primarily due to the incremental impact of our DRG acquisition which contributed $22 million in sales. Excluding the impact of DRG, sales in the naval defense market increased $11 million primarily due to higher production levels of CVN-80 pumps. Within the power generation market, sales decreased $23 million as lower production volumes on the AP1000 U.S. program were partially offset by higher revenues on the AP1000 China Direct program.

Operating income in the second quarter of 2018 decreased $5 million , or 20% , to $19 million , and operating margin decreased 400 basis points from the prior year period to 11.9% . Operating income during the six months ended June 30, 2018 decreased $5 million , or 12% , to $35 million , and operating margin decreased 230 basis points from the prior year period to 11.8% . The decreases in operating income and operating margin for each of the respective periods were primarily due to first year purchase accounting costs on the DRG acquisition, lower production levels on the AP1000 U.S. program, and reduced profitability in the nuclear aftermarket business. These decreases were partially offset by our ongoing margin improvement initiatives.
 
New orders increased $123 million and $82 million during the second quarter and six months ended June 30, 2018 from the comparable prior year periods, primarily due to the timing of customer funding and the DRG acquisition.

SUPPLEMENTARY INFORMATION

The table below depicts sales by end market. End market sales help provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our consolidated operating results.

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

	
																						
Net Sales by End Market	Three Months Ended	 	Six Months Ended	
	June 30,	 	June 30,	
(In thousands)	2018	 	2017	 	% change	 	2018	 	2017	 	% change	
Defense markets:	 	 	 	 	 	 	 	 	 	 	 	
Aerospace	$	98,268		 	$	89,367		 	10	%	 	$	174,209		 	$	154,661		 	13	%	
Ground	20,272		 	17,515		 	16	%	 	42,282		 	37,251		 	14	%	
Naval	132,005		 	100,048		 	32	%	 	234,786		 	191,018		 	23	%	
Other	3,422		 	5,964		 	(43	%)	 	8,004		 	13,006		 	(38	%)	
Total Defense	$	253,967		 	$	212,894		 	19	%	 	$	459,281		 	$	395,936		 	16	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Commercial markets:	 	 	 	 	 	 	 	 	 	 	 	
Aerospace	$	104,617		 	$	100,353		 	4	%	 	$	204,021		 	$	198,966		 	3	%	
Power Generation	102,075		 	114,773		 	(11	%)	 	201,087		 	220,324		 	(9	%)	
General Industrial	159,639		 	139,633		 	14	%	 	303,431		 	276,018		 	10	%	
Total Commercial	$	366,331		 	$	354,759		 	3	%	 	$	708,539		 	$	695,308		 	2	%	
 	 	 	 	 	 	 	 	 	 	 	 	
Total Curtiss-Wright	$	620,298		 	$	567,653		 	9	%	 	$	1,167,820		 	$	1,091,244		 	7	%	

Note: Certain amounts in the prior year have been reclassed to conform to the current year presentation.

Defense markets
Sales during the second quarter increased $41 million , or 19% , to $254 million against the comparable prior year period while sales during the six months ended June 30, 2018 increased $63 million , or 16% , to $459 million . The increases in each of the respective periods were primarily due to higher sales in the aerospace defense and naval defense markets. The sales increases in the aerospace defense market were primarily due to increased demand for data acquisition and flight test equipment and higher sales of actuation systems on fighter jets, partially offset by lower sales of embedded computing products supporting various ISR programs and declines in UAV production. Higher sales in the naval defense market were primarily due to the incremental impact from our DRG acquisition, which contributed $21 million in sales during both the second quarter and six months ended June 30, 2018. Excluding the impact of DRG, naval defense sales also benefited from higher aircraft carrier program revenues of $9 million and $19 million during the second quarter and six months ended June 30, 2018, respectively.

Commercial markets
Sales during the second quarter increased $12 million , or 3% , to $366 million against the comparable prior year period while sales during the six months ended June 30, 2018 increased $13 million , or 2% , to $709 million . The increases in each of the respective periods were primarily due to increased sales in the general industrial market, partially offset by declines within the power generation market. In the general industrial market, we experienced higher demand for our industrial vehicle, industrial controls, and industrial valve products. Within the power generation market, we generated lower production revenues of $8 million and $18 million on the AP1000 U.S. program for the second quarter and six months ended June 30, 2018, respectively. The sales decrease for the six months ended June 30, 2018 was partially offset by higher production revenues on the AP1000 China Direct program.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

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

Page 29

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets, are sufficient to meet both the short-term and long-term capital needs of the organization.

	
								
Condensed Consolidated Statements of Cash Flows
	 	 	 	
(In thousands)	June 30, 2018	 	June 30, 2017	
Cash provided by (used in):	 	 	 	
Operating activities	$	26,685		 	$	60,932		
Investing activities	(230,489	)	 	(255,569	)	
Financing activities	(45,934	)	 	(27,021	)	
Effect of exchange-rate changes on cash	(6,484	)	 	10,521		
Net decrease in cash and cash equivalents	(256,222	)	 	(211,137	)	

Net cash provided by operating activities decreased $34 million from the prior year period.  The decrease in net cash provided is primarily due to a voluntary pension contribution of $50 million during the current period, partially offset by higher earnings.

Net cash used for investing activities decreased $25 million from the comparable prior year period primarily due to cash used for acquisitions as well as lower capital expenditures in the current period. The Corporation acquired one business during the six months ended June 30, 2018 for approximately $213 million . The Corporation acquired two businesses during the six months ended June 30, 2017 for approximately $233 million .

Financing Activities

Debt

The Corporation’s debt outstanding had an average interest rate of 3.7% for both the three and six months ended June 30, 2018 as compared to an average interest rate of 4.0% for both the three and six months ended June 30, 2017 . The Corporation’s average debt outstanding was $905 million and $853 million for the three and six months ended June 30, 2018 , respectively, and $950 million for both the three and six months ended June 30, 2017 .

Revolving Credit Agreement

As of June 30, 2018 , the Corporation had no outstanding borrowings under the 2012 Senior Unsecured Revolving Credit Agreement (the “Credit Agreement” or “credit facility”) and $20 million in letters of credit supported by the credit facility. The unused credit available under the Credit Agreement as of June 30, 2018 was $480 million which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the six months ended June 30, 2018 , the Corporation used $46 million of cash to repurchase approximately 357,000 outstanding shares under its share repurchase program. During the six months ended June 30, 2017 , the Corporation used $26 million of cash to repurchase approximately 284,000 outstanding shares under its share repurchase program.

Dividends

The Corporation made dividend payments of $7 million and $6 million during the six months ended June 30, 2018 and June 30, 2017 , respectively.

Debt Compliance

Page 30

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
PART I - ITEM 2
MANAGEMENT’S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS OF OPERATIONS, continued

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

As of June 30, 2018 , we had the ability to borrow additional debt of $1,443 million without violating our debt to capitalization covenant.

CRITICAL ACCOUNTING POLICIES
 
Our condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by the application of our accounting policies. Critical accounting policies are those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our 2017 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 22, 2018 , in the Notes to the
Consolidated Financial Statements, Note 1, and the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Page 31

Item 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
There have been no material changes in our market risk during the six months ended June 30, 2018 .  Information regarding market risk and market risk management policies is more fully described in item “7A.Quantitative and Qualitative Disclosures about Market Risk” of our 2017 Annual Report on Form 10-K.
 
Item 4.                      CONTROLS AND PROCEDURES
 
As of June 30, 2018 , our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of June 30, 2018 insofar as they are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and they include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
During the quarter ended June 30, 2018 , there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Page 32

PART II - OTHER INFORMATION

Item 1.                     LEGAL PROCEEDINGS
 
In the ordinary course of business, the Corporation and its subsidiaries are subject to various pending claims, lawsuits, and contingent liabilities. We do not believe that the disposition of any of these matters, individually or in the aggregate, will have a material adverse effect on our consolidated financial condition, results of operations, and cash flows.

In December 2013, the Corporation, along with other unaffiliated parties, received a claim from Canadian Natural Resources Limited (CNRL), which was filed in the Court of Queen's Bench of Alberta, Judicial District of Calgary. The claim pertains to a January 2011 fire and explosion at a delayed coker unit at its Fort McMurray refinery that resulted in the injury of five CNRL employees, damage to property and equipment, and various forms of consequential loss such as loss of profit, lost opportunities, and business interruption. The fire and explosion occurred when a CNRL employee bypassed certain safety controls and opened an operating coker unit. The total quantum of alleged damages arising from the incident has not been finalized, but is estimated to meet or exceed $1 billion.  We maintain various forms of commercial, property and casualty, product liability, and other forms of insurance; however, such insurance may not be adequate to cover the costs associated with a judgment against us. In October 2017, all parties agreed in principle to participate in a formal mediation in late 2018 with the intention of settling this claim. In an effort to induce the parties to participate in the formal mediation, CNRL agreed to reduce its claim to approximately $400 million, which reflects the monetary amount of property damage incurred as result of the fire and explosion. We are currently unable to estimate an amount, or range of potential losses, if any, from this matter. We believe that we have adequate legal defenses and intend to defend this matter vigorously. Our financial condition, results of operations, and cash flows could be materially affected during a future fiscal quarter or fiscal year by unfavorable developments or outcome regarding this claim.

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

On March 29, 2017, WEC filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York (the Court), Case No. 17-10751.  The Court overseeing the Bankruptcy Case approved, on an interim basis, an $800 million Debtor-in-Possession Financing Facility to help WEC finance its business operations during the reorganization process. On January 4, 2018, WEC announced that it had agreed to be acquired by Brookfield Business Partners L.P. (Brookfield) for approximately $4.6 billion, with the acquisition expected to close in the third quarter of 2018. On March 27, 2018, the Court approved the sale to Brookfield. The acquisition is not expected to have a material impact on our financial condition or results of operations as WEC plans to continue operating in the ordinary course of business under existing senior management.

We have approximately $2.9 million in pre-petition billings outstanding with WEC as of June 30, 2018. On March 27, 2018, the Court approved WEC's Plan of Reorganization, whereby we are expected to recover substantially all of our general unsecured claims inclusive of pre-petition billings. As it relates to our post-petition work, we will continue to honor our executory contracts and expect to collect all amounts due.  We will continue to monitor and evaluate the status of the WEC bankruptcy for potential impacts on our business.

Item 1A.          RISK FACTORS
 
There have been no material changes in our Risk Factors during the six months ended June 30, 2018 . Information regarding our Risk Factors is more fully described in Item “1A. Risk Factors” of our 2017 Annual Report on Form 10-K.

  Item 2.            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
 
The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended June 30, 2018 .

Page 33

	
															
 	 	Total Number of shares purchased	 	Average Price Paid per Share	 	Total Number of Shares Purchased as Part of a Publicly Announced Program	 	Maximum Dollar amount of shares that may yet be Purchased Under the Program	
April 1 - April 30	 	30,672		 	$	136.90		 	125,460		 	$	132,864,397		
May 1 - May 31	 	144,489		 	129.15		 	269,949		 	114,204,052		
June 1 - June 30	 	86,910		 	125.73		 	356,859		 	103,276,678		
For the quarter ended June 30, 2018	 	262,071		 	$	129.22		 	356,859		 	$	103,276,678		

On November 30, 2017, the Corporation authorized $50 million of share repurchases in 2018 through a 10b5-1 program. On May 18, 2018, the Corporation authorized an additional $50 million of share repurchases for 2018 through the same 10b5-1 program. The Corporation is also able to repurchase additional shares opportunistically on the open market, in privately negotiated transactions, or under plans complying with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended, through a supplemental program.

Item 3.                      DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.                      MINE SAFETY DISCLOSURES
 
Not applicable.

Item 5.                      OTHER INFORMATION
 
There have been no material changes in our procedures by which our security holders may recommend nominees to our board of directors during the six months ended June 30, 2018 .  Information regarding security holder recommendations and nominations for directors is more fully described in the section entitled “Stockholder Recommendations and Nominations for Director” of our 2018 Proxy Statement on Schedule 14A, which is incorporated by reference to our 2017 Annual Report on Form 10-K.

Page 34

Item 6.                      EXHIBITS

	
						
 	 	 	Incorporated by Reference	Filed	
Exhibit No.	 	Exhibit Description	Form	Filing Date	Herewith	
 	 	 	 	 	 	
3.1	 	Amended and Restated Certificate of Incorporation of the Registrant	8-A/A	May 24, 2005	 	
 	 	 	 	 	 	
3.2	 	Amended and Restated Bylaws of the Registrant	8-K	May 18, 2015	 	
 	 	 	 	 	 	
31.1	 	Certification of David C. Adams, Chairman and CEO, Pursuant to Rules 13a – 14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended	 	 	X	
 	 	 	 	 	 	
31.2	 	Certification of Glenn E. Tynan, Chief Financial Officer, Pursuant to Rules 13a – 14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended	 	 	X	
 	 	 	 	 	 	
32	 	Certification of David C. Adams, Chairman and CEO, and Glenn E. Tynan, Chief Financial Officer, Pursuant to 18 U.S.C. Section 1350	 	 	X	
 	 	 	 	 	 	
101.INS	 	XBRL Instance Document	 	 	X	
 	 	 	 	 	 	
101.SCH	 	XBRL Taxonomy Extension Schema Document	 	 	X	
 	 	 	 	 	 	
101.CAL	 	XBRL Taxonomy Extension Calculation Linkbase Document	 	 	X	
 	 	 	 	 	 	
101.DEF	 	XBRL Taxonomy Extension Definition Linkbase Document	 	 	X	
 	 	 	 	 	 	
101.LAB	 	XBRL Taxonomy Extension Label Linkbase Document	 	 	X	
 	 	 	 	 	 	
101.PRE	 	XBRL Taxonomy Extension Presentation Linkbase Document	 	 	X	

Page 35

SIGNATURE

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

CURTISS-WRIGHT CORPORATION
(Registrant)

By:      /s/ Glenn E. Tynan
Glenn E. Tynan
Vice President and Chief Financial Officer
Dated: July 26, 2018

Page 36

Exhibit 31.1

Certifications

I, David C. Adams, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Curtiss-Wright Corporation;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and	

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

Date: July 26, 2018

/s/ David C. Adams
David C. Adams
Chairman and Chief Executive Officer

Exhibit 31.2

Certifications

I, Glenn E. Tynan, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Curtiss-Wright Corporation;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:	

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and	

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):	

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and	

b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.	

Date: July 26, 2018

/s/ Glenn E. Tynan
Glenn E. Tynan
Vice President and Chief Financial Officer

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Curtiss-Wright Corporation (the "Company") on Form 10-Q for the period ended June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), David C. Adams, as Chairman and Chief Executive Officer of the Company, and Glenn E. Tynan, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. section 1350, that to the best of his knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David C. Adams

David C. Adams
Chairman and Chief Executive Officer
July 26, 2018

/s/ Glenn E. Tynan

Glenn E. Tynan
Vice President and Chief Financial Officer
July 26, 2018