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

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2023

or

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

Commission File Number 1-134

CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
									
Delaware		13-0612970	
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)	

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

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

Securities registered pursuant to Section 12(b) of the Act:
									
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Common Stock	CW	New York Stock Exchange	

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

Yes  ☒                        No  ☐

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

Yes  ☒                        No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
															
Large accelerated filer	☒		Accelerated filer	☐	
Non-accelerated filer	☐		Smaller reporting company	☐	
			Emerging growth company	☐	
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐	

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

Yes  ☐   No  ☒

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

Common Stock, par value $1.00 per share: 38,342,932 shares as of April 30, 2023.

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	17	
				
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27	
				
Item 4.	Controls and Procedures	27	

PART II – OTHER INFORMATION		

Item 1.	Legal Proceedings	28	
				
Item 1A.	Risk Factors	28	
				
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28	
			
Item 3.	Defaults upon Senior Securities	28	
			
Item 4.	Mine Safety Disclosures	28	
			
Item 5.	Other Information	28	
				
Item 6.	Exhibits	30	
				
Signatures		31	

Page 3

PART 1- FINANCIAL INFORMATION
Item 1. Financial Statements

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
												
	Three Months Ended	
	March 31,	
(In thousands, except per share data)	2023		2022	
Net sales				
Product sales	$	524,881 			$	453,421 		
Service sales	105,979 			106,040 		
Total net sales	630,860 			559,461 		
Cost of sales				
Cost of product sales	343,757 			294,527 		
Cost of service sales	65,695 			63,532 		
Total cost of sales	409,452 			358,059 		
Gross profit	221,408 			201,402 		
Research and development expenses	22,024 			20,549 		
Selling expenses	32,425 			28,092 		
General and administrative expenses	88,344 			87,600 		
Loss on divestiture	— 			4,651 		
Operating income	78,615 			60,510 		
Interest expense	12,944 			9,530 		
Other income, net	7,767 			2,997 		
Earnings before income taxes	73,438 			53,977 		
Provision for income taxes	(16,592)			(13,292)		
Net earnings	$	56,846 			$	40,685 		
				
Net earnings per share:				
Basic earnings per share	$	1.48 			$	1.06 		
Diluted earnings per share	$	1.48 			$	1.05 		
				
Dividends per share	0.19 			0.18 		
				
Weighted-average shares outstanding:				
Basic	38,303 			38,456 		
Diluted	38,516 			38,668 		
				
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	
	March 31,	
	2023		2022	
Net earnings	$	56,846 			$	40,685 		
Other comprehensive income (loss)				
Foreign currency translation adjustments, net of tax (1)	$	14,666 			$	(6,825)		
Pension and postretirement adjustments, net of tax (2)	(192)			5,766 		
Other comprehensive income (loss), net of tax	14,474 			(1,059)		
Comprehensive income	$	71,320 			$	39,626 		

(1) The tax benefit included in foreign currency translation adjustments for the three months ended March 31, 2023 was $2.4 million. The tax benefit included in foreign currency translation adjustments for the three months ended March 31, 2022 was immaterial.

(2) The tax benefit included in pension and postretirement adjustments for the three months ended March 31, 2023 was immaterial. The tax expense included in pension and postretirement adjustments for the three months ended March 31, 2022 was $1.4 million.

See notes to condensed consolidated financial statements
Page 5

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except per share data)
												
	March 31, 2023		December 31, 2022	
Assets				
Current assets:				
Cash and cash equivalents	$	130,659 			$	256,974 		
Receivables, net	720,248 			724,603 		
Inventories, net	527,937 			483,113 		
Other current assets	67,415 			52,623 		
Total current assets	1,446,259 			1,517,313 		
Property, plant, and equipment, net	340,313 			342,708 		
Goodwill	1,549,148 			1,544,635 		
Other intangible assets, net	605,217 			620,897 		
Operating lease right-of-use assets, net	145,017 			153,855 		
Prepaid pension asset	227,547 			222,627 		
Other assets	48,624 			47,567 		
Total assets	$	4,362,125 			$	4,449,602 		
Liabilities	 		 	
Current liabilities:				
Current portion of long-term debt	$	— 			$	202,500 		
Accounts payable	207,573 			266,525 		
Accrued expenses	153,678 			177,536 		
Deferred revenue	234,487 			242,483 		
Other current liabilities	76,452 			82,395 		
Total current liabilities	672,190 			971,439 		
Long-term debt	1,229,619 			1,051,900 		
Deferred tax liabilities, net	122,607 			123,001 		
Accrued pension and other postretirement benefit costs	58,062 			58,348 		
Long-term operating lease liability	124,025 			132,275 		
Long-term portion of environmental reserves	13,171 			12,547 		
Other liabilities	88,292 			107,973 		
Total liabilities	2,307,966 			2,457,483 		
Contingencies and commitments (Note 13)				
Stockholders’ equity				
Common stock, $1 par value,100,000,000 shares authorized as of March 31, 2023 and December 31, 2022; 49,187,378 shares issued as of March 31, 2023 and December 31, 2022; outstanding shares were 38,364,387 as of March 31, 2023 and 38,259,722 as of December 31, 2022	49,187 			49,187 		
Additional paid in capital	126,909 			134,553 		
Retained earnings	3,223,944 			3,174,396 		
Accumulated other comprehensive loss	(244,442)			(258,916)		
Common treasury stock, at cost (10,822,991 shares as of March 31, 2023 and 10,927,656 shares as of December 31, 2022)	(1,101,439)			(1,107,101)		
Total stockholders’ equity	2,054,159 			1,992,119 		
Total liabilities and stockholders’ equity	$	4,362,125 			$	4,449,602 		
				
See notes to condensed consolidated financial statements	

Page 6

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
												
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022	
Cash flows from operating activities:				
Net earnings	$	56,846 			$	40,685 		
Adjustments to reconcile net earnings to net cash used for operating activities:				
Depreciation and amortization	28,927 			27,363 		
Loss on divestiture	— 			4,651 		
(Gain) loss on sale/disposal of long-lived assets	93 			(3,070)		
Deferred income taxes	(2,619)			803 		
Share-based compensation	5,179 			3,809 		
Change in operating assets and liabilities, net of businesses acquired:				
Receivables, net	6,153 			(13,414)		
Inventories, net	(42,773)			(38,149)		
Progress payments	(163)			(395)		
Accounts payable and accrued expenses	(85,442)			(72,565)		
Deferred revenue	(8,252)			(35,154)		
Pension and postretirement liabilities, net	(4,946)			(6,034)		
Other current and long-term assets and liabilities	(44,602)			(32,845)		
Net cash used for operating activities	(91,599)			(124,315)		
Cash flows from investing activities:				
Proceeds from sale/disposal of long-lived assets	224 			5,567 		
Additions to property, plant, and equipment	(10,661)			(10,896)		
Additional consideration paid on prior year acquisitions	— 			(5,062)		
Net cash used for investing activities	(10,437)			(10,391)		
Cash flows from financing activities:				
Borrowings under revolving credit facility	465,025 			241,198 		
Payment of revolving credit facility	(286,825)			(121,198)		
Principal payments on debt	(202,500)			— 		
Repurchases of common stock	(12,386)			(18,857)		
Proceeds from share-based compensation	5,225 			5,284 		
Other	(268)			(248)		
Net cash provided by (used for) financing activities	(31,729)			106,179 		
Effect of exchange-rate changes on cash	7,450 			(5,795)		
Net decrease in cash and cash equivalents	(126,315)			(34,322)		
Cash and cash equivalents at beginning of period	256,974 			171,004 		
Cash and cash equivalents at end of period	$	130,659 			$	136,682 		
See notes to condensed consolidated financial statements	

Page 7

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

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

	For the three months ended March 31, 2023	
	Common Stock		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock	
December 31, 2022	$	49,187 			$	134,553 			$	3,174,396 			$	(258,916)			$	(1,107,101)		
Net earnings	— 			— 			56,846 			— 			— 		
Other comprehensive income, net of tax	— 			— 			— 			14,474 			— 		
Dividends declared	— 			— 			(7,298)					— 		
Restricted stock	— 			(13,805)			— 			— 			13,805 		
Employee stock purchase plan	— 			1,483 			— 			— 			3,742 		
Share-based compensation	— 			4,939 			— 			— 			240 		
Repurchase of common stock (1)	— 			— 			— 			— 			(12,386)		
Other	— 			(261)			— 			— 			261 		
March 31, 2023	$	49,187 			$	126,909 			$	3,223,944 			$	(244,442)			$	(1,101,439)		
(1) For both the three months ended March 31, 2023 and 2022, the Corporation repurchased approximately 0.1 million shares of its common stock.
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 integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense (A&D) markets, as well as critical technologies in demanding commercial power, process, and industrial markets.

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

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

Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete using the over-time revenue recognition accounting method, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three months ended March 31, 2023 and 2022, there were no significant changes in estimated contract costs. In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in these financial statements.

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 2022 Annual Report on Form 10-K filed with the SEC. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

2.           REVENUE

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

Performance Obligations

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

The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. If a performance obligation does not qualify for over-time revenue recognition, revenue is then recognized at the point-in-time in which control of the distinct good or service is transferred to the customer, typically based upon the terms of delivery.

The following table illustrates the approximate percentage of revenue recognized for performance obligations satisfied over-time versus at a point-in-time for the three months ended March 31, 2023 and 2022:
Page 9

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

												
	Three Months Ended	
	March 31,	
	2023		2022	
Over-time	49 	%		53 	%	
Point-in-time	51 	%		47 	%	

Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $2.7 billion as of March 31, 2023, of which the Corporation expects to recognize approximately 90% as net sales over the next 36 months. The remainder will be recognized thereafter.

Disaggregation of Revenue

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

Total Net Sales by End Market and Customer Type	Three Months Ended	
	March 31,	
(In thousands)	2023		2022	
Aerospace & Defense				
Aerospace Defense	$	99,879 			$	98,004 		
Ground Defense	66,256 			39,108 		
Naval Defense	171,956 			162,967 		
Commercial Aerospace	70,490 			60,892 		
Total Aerospace & Defense customers	$	408,581 			$	360,971 		
				
Commercial				
Power & Process	$	120,339 			$	104,788 		
General Industrial	101,940 			93,702 		
Total Commercial customers	$	222,279 			$	198,490 		
				
Total	$	630,860 			$	559,461 		

Contract Balances

Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the three months ended March 31, 2023 and 2022 included in contract liabilities at the beginning of the respective years was approximately $89 million and $79 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

3.           ASSETS HELD FOR SALE

In January 2022, the Corporation completed the sale of its industrial valve business in Germany for gross cash proceeds of $3 million. The Corporation recorded a loss of $5 million upon sale closing during the first quarter of 2022.

4.           RECEIVABLES

Page 10

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

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)	March 31, 2023		December 31, 2022	
Billed receivables:				
Trade and other receivables	$	397,301 			$	412,682 		
Unbilled receivables:				
Recoverable costs and estimated earnings not billed	328,199 			316,682 		
Less: Progress payments applied	(28)			(67)		
Net unbilled receivables	328,171 			316,615 		
Less: Allowance for doubtful accounts	(5,224)			(4,694)		
Receivables, net	$	720,248 			$	724,603 		

5.           INVENTORIES

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

The composition of inventories is as follows:
												
(In thousands)	March 31, 2023		December 31, 2022	
Raw materials	$	259,191 			$	242,116 		
Work-in-process	93,948 			76,328 		
Finished goods	134,348 			128,090 		
Inventoried costs related to U.S. Government and other long-term contracts (1)	43,433 			39,685 		
Inventories, net of reserves	530,920 			486,219 		
Less:  Progress payments applied	(2,983)			(3,106)		
Inventories, net	$	527,937 			$	483,113 		

(1) As of March 31, 2023, this caption includes capitalized development costs of $16.3 million related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of March 31, 2023, capitalized development costs of $10.6 million are not currently supported by existing firm orders.

6.           GOODWILL

The changes in the carrying amount of goodwill for the three months ended March 31, 2023 are as follows:

(In thousands)	Aerospace & Industrial		Defense Electronics		Naval & Power		Consolidated	
December 31, 2022	$	321,550 			$	702,786 			$	520,299 			$	1,544,635 		
Foreign currency translation adjustment	1,473 			2,224 			816 			4,513 		
March 31, 2023	$	323,023 			$	705,010 			$	521,115 			$	1,549,148 		

7.           OTHER INTANGIBLE ASSETS, NET
Page 11

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

 
The following tables present the cumulative composition of the Corporation’s intangible assets:
																																							
		March 31, 2023		December 31, 2022	
(In thousands)		Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net	
Technology		$	306,710 			$	(181,330)			$	125,380 			$	306,160 			$	(176,675)			$	129,485 		
Customer related intangibles		668,233 			(308,903)			359,330 			666,638 			(298,160)			368,478 		
Programs (1)		144,000 			(36,000)			108,000 			144,000 			(34,200)			109,800 		
Other intangible assets		53,982 			(41,475)			12,507 			53,879 			(40,745)			13,134 		
Total		$	1,172,925 			$	(567,708)			$	605,217 			$	1,170,677 			$	(549,780)			$	620,897 		
													
(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. 

Total intangible amortization expense for the three months ended March 31, 2023 was $16 million, as compared to $14 million in the comparable prior year period.  The estimated future amortization expense of intangible assets over the next five years is as follows:

(In millions)		
2023	$	65 		
2024	$	57 		
2025	$	54 		
2026	$	53 		
2027	$	50 		

8.           FAIR VALUE OF FINANCIAL INSTRUMENTS
 
Forward Foreign Exchange and Currency Option Contracts

The Corporation has foreign currency exposure, primarily against the British Pound, Euro, and Canadian dollar. The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions. The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations. Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.
 
Interest Rate Risks and Related Strategies
 
The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt.

Effects on Condensed Consolidated Balance Sheets

As of March 31, 2023 and December 31, 2022, the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings

Undesignated hedges

The losses and gains and on forward exchange derivative contracts not designated for hedge accounting are recognized to general and administrative expenses within the Condensed Consolidated Statements of Earnings. The gain for the three months ended March 31, 2023 was $4 million. The loss for the three months ended March 31, 2022 was immaterial.

Debt
Page 12

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

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of March 31, 2023.  Accordingly, all of the Corporation’s debt is valued as a Level 2 financial instrument.  The fair values described below may not be indicative of net realizable value or reflective of future fair values.  Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

	March 31, 2023		December 31, 2022	
(In thousands)	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value	
Revolving credit agreement, due 2027	$	178,200 			$	178,200 			$	— 			$	— 		
3.70% Senior notes due 2023	— 			— 			202,500 			202,082 		
3.85% Senior notes due 2025	90,000 			88,331 			90,000 			87,298 		
4.24% Senior notes due 2026	200,000 			195,529 			200,000 			191,760 		
4.05% Senior notes due 2028	67,500 			64,926 			67,500 			63,300 		
4.11% Senior notes due 2028	90,000 			86,338 			90,000 			83,955 		
3.10% Senior notes due 2030	150,000 			131,958 			150,000 			127,429 		
3.20% Senior notes due 2032	150,000 			128,166 			150,000 			123,656 		
4.49% Senior notes due 2032	200,000 			189,022 			200,000 			183,007 		
4.64% Senior notes due 2034	100,000 			93,730 			100,000 			90,341 		
Total debt	1,225,700 			1,156,200 			1,250,000 			1,152,828 		
Debt issuance costs, net	(1,705)			(1,705)			(1,631)			(1,631)		
Unamortized interest rate swap proceeds	5,624 			5,624 			6,031 			6,031 		
Total debt, net	$	1,229,619 			$	1,160,119 			1,254,400 			1,157,228 		

9.           PENSION PLANS

Defined Benefit Pension Plans

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s 2022 Annual Report on Form 10-K filed with the SEC.

The components of net periodic pension cost/(benefit) were as follows:
												
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022	
Service cost	$	4,127 			$	6,063 		
Interest cost	8,790 			5,288 		
Expected return on plan assets	(15,820)			(13,857)		
Amortization of prior service cost	(33)			(86)		
Amortization of unrecognized actuarial loss	77 			4,006 		
Cost of settlements	— 			1,842 		
Net periodic pension cost/(benefit)	$	(2,859)			$	3,256 		

The Corporation did not make any contributions to the Curtiss-Wright Pension Plan during the three months ended March 31, 2023, and does not expect to do so throughout the remainder of the year. Contributions to the foreign benefit plans are not expected to be material in 2023.

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

Page 13

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

Defined Contribution Retirement Plan

The Company also maintains a defined contribution plan for all non-union employees who are not currently receiving final or career average pay benefits for its U.S. subsidiaries. The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three months ended March 31, 2023 and 2022, the expense relating to the plan was $6.1 million and $5.7 million, respectively.

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	
	March 31,	
(In thousands)	2023		2022	
Basic weighted-average shares outstanding	38,303 			38,456 		
Dilutive effect of deferred stock compensation	213 			212 		
Diluted weighted-average shares outstanding	38,516 			38,668 		

For the three months ended March 31, 2023 and 2022, approximately 24,000 and 26,000 shares, respectively, issuable under equity-based awards were excluded from the calculation of diluted earnings per share as they were anti-dilutive based on the average stock price during the period.

11.           SEGMENT INFORMATION
 
The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.
Net sales and operating income by reportable segment were as follows:
												
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022	
Net sales				
Aerospace & Industrial	$	203,586 			$	191,850 		
Defense Electronics	163,070 			143,938 		
Naval & Power	266,814 			225,315 		
Less: Intersegment revenues	(2,610)			(1,642)		
Total consolidated	$	630,860 			$	559,461 		
				
Operating income (expense)				
Aerospace & Industrial	$	26,545 			$	24,853 		
Defense Electronics	23,368 			23,290 		
Naval & Power	37,937 			27,288 		
Corporate and other (1)	(9,235)			(14,921)		
Total consolidated	$	78,615 			$	60,510 		
(1) Includes pension and other postretirement benefit expense, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.

Adjustments to reconcile operating income to earnings before income taxes are as follows:
Page 14

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

												
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022	
Total operating income	$	78,615 			$	60,510 		
Interest expense	12,944 			9,530 		
Other income, net	7,767 			2,997 		
Earnings before income taxes	$	73,438 			$	53,977 		

(In thousands)	March 31, 2023		December 31, 2022	
Identifiable assets				
Aerospace & Industrial	$	1,041,860 			$	1,041,562 		
Defense Electronics	1,545,190 			1,546,331 		
Naval & Power	1,498,003 			1,488,867 		
Corporate and Other	277,072 			372,842 		
Total consolidated	$	4,362,125 			$	4,449,602 		

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, 2021	$	(99,566)			$	(90,899)			$	(190,465)		
Other comprehensive income (loss) before reclassifications (1)	(61,241)			(23,447)			(84,688)		
Amounts reclassified from accumulated other comprehensive loss (1)	— 			16,237 			16,237 		
Net current period other comprehensive income (loss)	(61,241)			(7,210)			(68,451)		
December 31, 2022	$	(160,807)			$	(98,109)			$	(258,916)		
Other comprehensive income (loss) before reclassifications (1)	14,666 			(223)			14,443 		
Amounts reclassified from accumulated other comprehensive income (loss) (1)	— 			31 			31 		
Net current period other comprehensive income (loss)	14,666 			(192)			14,474 		
March 31, 2023	$	(146,141)			$	(98,301)			$	(244,442)		

(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	$	33 		Other income, net	
Amortization of actuarial losses	(77)		Other income, net	
	(44)		Earnings before income taxes	
	13 		Provision for income taxes	
Total reclassifications	$	(31)		Net earnings	

13.           CONTINGENCIES AND COMMITMENTS
Page 15

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

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

Legal Proceedings

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

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. As of March 31, 2023 and December 31, 2022, there were $19 million and $17 million of stand-by letters of credit outstanding, respectively. As of March 31, 2023 and December 31, 2022, there were $14 million and $3 million of bank guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.  The Corporation has provided this financial assurance in the form of a $35 million surety bond.

AP1000 Program

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

******
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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, (d) impacts on our business relating to ongoing supply chain delivery disruptions, significant inflation, higher interest rates or deflation, and measures taken by governments and private industry in response, (e) statements of future economic performance and potential impacts due to the conflict between Russia and Ukraine, (f) the effect of laws, rules, regulations, new accounting pronouncements, and outstanding litigation on our business and future performance, and (g) 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 2022 Annual Report on Form 10-K filed with the SEC, 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 (including the Notes to Condensed Consolidated 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.

Page 17

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 global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets. We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments. We operate across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. Approximately 66% of our 2023 revenues are expected to be generated from A&D-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 months ended March 31, 2023. The financial information as of March 31, 2023 should be read in conjunction with the financial statements for the year ended December 31, 2022 contained in our Form 10-K filed with the SEC.

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

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

Analytical Definitions

Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. The definition of “organic” excludes the loss from sale of our industrial valves business in Germany as well as the effects of foreign currency translation.
Page 18

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

Condensed Consolidated Statements of Earnings						
 	Three Months Ended	
	March 31,	
(In thousands)	2023		2022		% change	
Sales	 		 		 	
Aerospace & Industrial	$	202,447 			$	191,112 			6 	%	
Defense Electronics	162,154 			143,069 			13 	%	
Naval & Power	266,259 			225,280 			18 	%	
Total sales	$	630,860 			$	559,461 			13 	%	
						
Operating income	 		 		 	
Aerospace & Industrial	$	26,545 			$	24,853 			7 	%	
Defense Electronics	23,368 			23,290 			— 	%	
Naval & Power	37,937 			27,288 			39 	%	
Corporate and other	(9,235)			(14,921)			38 	%	
Total operating income	$	78,615 			$	60,510 			30 	%	
						
Interest expense	12,944 			9,530 			(36)	%	
Other income, net	7,767 			2,997 			159 	%	
						
Earnings before income taxes	73,438 			53,977 			36 	%	
Provision for income taxes	(16,592)			(13,292)			(25 	%)	
Net earnings	$	56,846 			$	40,685 			40 	%	
						
New orders	$	717,817 			$	634,265 			13 	%	

Components of sales and operating income increase (decrease):
												
	Three Months Ended	
	March 31,	
	2023 vs. 2022	
	Sales		Operating Income	
Organic	11 	%		16 	%	
Acquisitions	3 	%		— 	%	
Loss on divestiture	— 	%		9 	%	
Foreign currency	(1 	%)		5 	%	
Total	13 	%		30 	%	

Sales during the three months ended March 31, 2023 increased $71 million, or 13%, to $631 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $11 million, $19 million, and $41 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income during the three months ended March 31, 2023 increased $18 million, or 30%, to $79 million, compared with the prior year period, while operating margin increased 170 basis points to 12.5%, compared with the same period in 2022. In the Naval & Power segment, increases in operating income and operating margin were primarily due to the absence of a prior year loss on sale of our industrial valves business in Germany, as well as favorable overhead absorption on higher organic sales.
Page 19

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

Operating income and operating margin in the Aerospace & Industrial segment increased primarily due to favorable overhead absorption on higher sales. In the Defense Electronics segment, operating income was essentially flat while operating margin decreased, as favorable absorption on higher sales was offset by unfavorable mix on defense electronics products.

Non-segment operating expense during the three months ended March 31, 2023 decreased $6 million, or 38%, to $9 million, primarily due to the absence of costs associated with shareholder activism in the prior year period.

Interest expense increased $3 million, or 36%, to $13 million, primarily due to the issuance of $300 million Senior Notes in October 2022 as well as higher interest rates in the current period under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”).

Other income, net during the three months ended March 31, 2023 increased $5 million, or 159%, to $8 million, primarily due to the absence of pension settlement charges recognized in the prior year period related to the retirement of a former executive.

The effective tax rate for the three months ended March 31, 2023 of 22.6% decreased as compared to an effective tax rate of 24.6% in the prior year period, primarily due to higher stock compensation benefits in the current period.

Comprehensive income for the three months ended March 31, 2023 was $71 million, compared to comprehensive income of $40 million in the prior year period. The change was primarily due to the following:

•Net earnings increased $16 million, primarily due to higher operating income.
•Foreign currency translation adjustments for the three months ended March 31, 2023 resulted in a $15 million comprehensive gain, compared to a $7 million comprehensive loss in the prior period. The comprehensive gain during the current period was primarily attributed to increases in the British Pound.

New orders increased $84 million during the three months ended March 31, 2023 from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment in the Defense Electronics segment, as well as an increase in orders for actuation products within our A&D markets in the Aerospace & Industrial segment. These increases were partially offset by the timing of naval defense orders in the Naval & Power segment. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

RESULTS BY BUSINESS SEGMENT

Aerospace & Industrial

The following tables summarize sales, operating income and margin, and new orders within the Aerospace & Industrial segment.
																		
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022		% change	
Sales	$	202,447 			$	191,112 			6 	%	
Operating income	26,545 			24,853 			7 	%	
Operating margin	13.1 	%		13.0 	%		10 	 bps	
New orders	$	258,644 			$	228,314 			13 	%	
Page 20

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

Components of sales and operating income increase (decrease):
												
	Three Months Ended	
	March 31,	
	2023 vs. 2022	
	Sales		Operating Income	
Organic	8 	%		4 	%	
Acquisitions	— 	%		— 	%	
Foreign currency	(2 	%)		3 	%	
Total	6 	%		7 	%	

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

Sales during the three months ended March 31, 2023 increased $11 million, or 6%, to $202 million from the prior year period, primarily due to higher demand for sensors products as well as surface treatment services on narrow-body and wide-body platforms in the commercial aerospace market. The general industrial market benefited from higher sales of surface treatment services and industrial vehicle products.

Operating income during the three months ended March 31, 2023 increased $2 million, or 7%, to $27 million from the prior year period, and operating margin increased 10 basis points to 13.1%. The increase in operating income and operating margin was primarily due to favorable overhead absorption on higher sales, partially offset by unfavorable mix on sensors products.

New orders during the three months ended March 31, 2023 increased $30 million from the comparable prior year period, primarily due to an increase in orders for actuation products within our A&D markets.

Defense Electronics

The following tables summarize sales, operating income and margin, and new orders within the Defense Electronics segment.
																		
	Three Months Ended	
	March 31,	
(In thousands)	2023		2022		% change	
Sales	$	162,154 			$	143,069 			13 	%	
Operating income	23,368 			23,290 			— 	%	
Operating margin	14.4 	%		16.3 	%		(190 	 bps)	
New orders	$	234,115 			$	159,688 			47 	%	

Components of sales and operating income increase (decrease):
												
	Three Months Ended	
	March 31,	
	2023 vs. 2022	
	Sales		Operating Income	
Organic	14 	%		(7 	%)	
Acquisitions	— 	%		— 	%	
Foreign currency	(1 	%)		7 	%	
Total	13 	%		— 	%	

Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market.
Page 21

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

Sales during the three months ended March 31, 2023 increased $19 million, or 13%, to $162 million from the prior year period. In the ground defense market, sales increased $27 million primarily due to higher demand for tactical battlefield communications equipment. This increase was partially offset by lower sales of $9 million in the aerospace defense market primarily due to timing of sales of embedded computing equipment on various helicopter and unmanned aerial vehicle programs.

Operating income during the three months ended March 31, 2023 of $23 million was essentially flat against the prior year period, and operating margin decreased 190 basis points from the prior year period to 14.4%, as favorable absorption on higher sales was offset by unfavorable mix on defense electronics products.

New orders during the three months ended March 31, 2023 increased $74 million from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment, including embedded computing and tactical communications products.

Naval & Power

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

	Three Months Ended	
	March 31,	
(In thousands)	2023		2022		% change	
Sales	$	266,259 			$	225,280 			18 	%	
Operating income	37,937 			27,288 			39 	%	
Operating margin	14.2 	%		12.1 	%		210 	 bps	
New orders	$	225,058 			$	246,263 			(9 	%)	

Components of sales and operating income increase (decrease):
												
	Three Months Ended	
	March 31,	
	2023 vs. 2022	
	Sales		Operating Income	
Organic	11 	%		18 	%	
Acquisitions	7 	%		— 	%	
Loss on divestiture	— 	%		20 	%	
Foreign currency	— 	%		1 	%	
Total	18 	%		39 	%	

Sales in the Naval & Power segment are primarily to the naval defense and power & process markets, and, to a lesser extent, the aerospace defense market.

Sales during the three months ended March 31, 2023 increased $41 million, or 18%, to $266 million from the prior year period, primarily due to higher sales across our aerospace defense, naval defense, and power & process markets. In the aerospace defense market, sales increased $16 million due to the incremental impact from our arresting systems acquisition. Sales in the naval defense market benefited $9 million primarily due to higher sales on the Columbia-class submarine and CVN-81 aircraft carrier programs, partially offset by the timing of sales on the CVN-80 aircraft carrier program. In the power & process market, sales increased $15 million primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors as well as higher industrial valve sales in the process market.

Page 22

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

Operating income during the three months ended March 31, 2023 increased $11 million, or 39%, to $38 million, and operating margin increased 210 basis points from the prior year period to 14.2%, primarily due to the absence of a prior year loss on sale of our industrial valves business in Germany as well as favorable overhead absorption on higher organic sales.

New orders decreased $21 million during the three months ended March 31, 2023 from the comparable prior year period, primarily due to the timing of naval defense orders.

SUPPLEMENTARY INFORMATION

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

Net Sales by End Market and Customer Type	Three Months Ended	
	March 31,	
(In thousands)	2023		2022		% change	
Aerospace & Defense markets:						
Aerospace Defense	$	99,879 			$	98,004 			2 	%	
Ground Defense	66,256 			39,108 			69 	%	
Naval Defense	171,956 			162,967 			6 	%	
Commercial Aerospace	70,490 			60,892 			16 	%	
Total Aerospace & Defense	$	408,581 			$	360,971 			13 	%	
						
Commercial markets:						
Power & Process	120,339 			104,788 			15 	%	
General Industrial	101,940 			93,702 			9 	%	
Total Commercial	$	222,279 			$	198,490 			12 	%	
						
Total Curtiss-Wright	$	630,860 			$	559,461 			13 	%	

Aerospace & Defense markets
Sales during the three months ended March 31, 2023 increased $48 million, or 13%, to $409 million, primarily due to higher sales in the ground defense, naval defense, and commercial aerospace markets. Sales in the ground defense market increased primarily due to higher demand for tactical battlefield communications equipment. Sales increases in the naval defense market were primarily due to higher sales on the Columbia-class submarine and CVN-81 aircraft carrier programs, partially offset by timing of sales on the CVN-80 aircraft carrier program. Sales in the commercial aerospace market benefited from higher demand for sensors products as well as surface treatment services on narrow-body and wide-body platforms. In the aerospace defense market, the incremental impact from our arresting systems acquisition was partially offset by the timing of sales of embedded computing equipment on various helicopter and unmanned aerial vehicle programs.

Commercial markets
Sales during the three months ended March 31, 2023 increased $24 million, or 12%, to $222 million. In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors, as well as higher industrial valve sales in the process market. The general industrial market benefited from higher sales of both surface treatment services and industrial vehicle products.

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

Page 23

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

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 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, including the return of capital to shareholders through dividends and share repurchases and growing our business through acquisitions.

Condensed Consolidated Statements of Cash Flows	Three Months Ended	
(In thousands)	March 31, 2023		March 31, 2022	
Cash provided by (used in):				
Operating activities	$	(91,599)			$	(124,315)		
Investing activities	(10,437)			(10,391)		
Financing activities	(31,729)			106,179 		
Effect of exchange-rate changes on cash	7,450 			(5,795)		
Net decrease in cash and cash equivalents	(126,315)			(34,322)		

Net cash used in operating activities decreased $33 million from the prior year period, primarily due to higher cash earnings and improved working capital. These increases were partially offset by higher tax payments in the current period.

Net cash used in investing activities of $10 million was essentially flat compared to the prior year period.

Net cash provided by financing activities decreased $138 million from the prior year period, primarily due to the repayment of our 2013 Notes. This decrease was partially offset by higher current period net borrowings under our credit facility. Refer to the "Financing Activities" section below for further details.

Financing Activities

Debt

During the three months ended March 31, 2023, we repaid $203 million of the 2013 Notes that matured on February 26, 2023.

The Corporation’s debt outstanding had an average interest rate of 4.4% and 3.2% for the three months ended March 31, 2023 and 2022, respectively. The Corporation’s average debt outstanding was $1,129 million and $1,112 million for the three months ended March 31, 2023 and 2022, respectively.

Credit Agreement

As of March 31, 2023, the Corporation had $178 million of outstanding borrowings under its credit facility and approximately $19 million in letters of credit supported by the credit facility. The unused credit available under the credit facility as of March 31, 2023 was $553 million which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the three months ended March 31, 2023, the Corporation used $12 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program. During the three months ended March 31, 2022, the Corporation used $19 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.

Cash Utilization
Page 24

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

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

Debt Compliance

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

As of March 31, 2023, we had the ability to borrow additional debt of approximately $1.8 billion without violating our debt to capitalization covenant.

Page 25

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

CRITICAL ACCOUNTING POLICIES

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by the application of our accounting policies. Critical accounting policies are those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our 2022 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 22, 2023, 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 26

Item 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
There have been no material changes in our market risk during the three months ended March 31, 2023.  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 2022 Annual Report on Form 10-K filed with the SEC.

Item 4.                      CONTROLS AND PROCEDURES
 
As of March 31, 2023, our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of March 31, 2023 insofar as they are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and they include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
During the quarter ended March 31, 2023, 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 27

PART II - OTHER INFORMATION

Item 1.                     LEGAL PROCEEDINGS
 
From time to time, we are involved in legal proceedings that are incidental to the operation of our business. Some of these proceedings allege damages relating to asbestos and environmental exposures, intellectual property matters, copyright infringement, personal injury claims, employment and employee benefit matters, government contract issues, commercial or contractual disputes, and acquisitions or divestitures. We continue to defend vigorously against all claims. Although the ultimate outcome of any legal matter cannot be predicted with certainty, based on present information, including assessment of the merits of the particular claim, as well as current accruals and insurance coverage, we do not believe that the disposition of any of these matters, individually or in the aggregate, will have a material adverse effect on our condensed consolidated financial condition, results of operations, and cash flows.

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

Item 1A.          RISK FACTORS
 
There have been no material changes in our Risk Factors during the three months ended March 31, 2023. Information regarding our Risk Factors is more fully described in "Item 1A. Risk Factors" of our 2022 Annual Report on Form 10-K filed with the SEC.

 Item 2.            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended March 31, 2023.
																								
 	Total Number of shares purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Maximum Dollar amount of shares that may yet be Purchased Under the Program	
January 1 - January 31	24,406 			$	163.72 			24,406 			$	196,143,724 		
February 1 - February 28	22,046 			$	172.18 			46,452 			$	192,347,880 		
March 1 - March 31	26,700 			$	172.09 			73,152 			$	187,753,159 		
For the quarter ended March 31, 2023	73,152 			$	169.32 			73,152 			$	187,753,159 		

In December 2022, the Corporation adopted two written trading plans in connection with its previously authorized share repurchase program, of which approximately $200 million remains available for repurchase. The first trading plan includes share repurchases of $50 million, to be executed equally throughout the 2023 calendar year. The second trading plan includes opportunistic share repurchases up to $100 million to be executed through a 10b5-1 program. The terms of these trading plans can be found in the Corporation’s Form 8-K filed with U.S. Securities and Exchange Commission on December 14, 2022.

Item 3.                      DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.                      MINE SAFETY DISCLOSURES
 
Not applicable.

Item 5.                      OTHER INFORMATION
 
Page 28

There have been no material changes in our procedures by which our security holders may recommend nominees to our board of directors during the three months ended March 31, 2023.  Information regarding security holder recommendations and nominations for directors is more fully described in the section entitled “Stockholder Nominations for Director” of our 2023 Proxy Statement on Schedule 14A, which is incorporated by reference to our 2022 Annual Report on Form 10-K.
Page 29

Item 6.                      EXHIBITS
																		
			Incorporated by Reference	Filed	
Exhibit No.		Exhibit Description	Form	Filing Date	Herewith	
						
3.1		Amended and Restated Certificate of Incorporation of the Registrant	8-A12B/A	May 24, 2005		
						
3.2		Amended and Restated Bylaws of the Registrant	8-K	May 18, 2015		
						
31.1		Certification of Lynn M. Bamford, Chair 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 K. Christopher Farkas, Chief Financial Officer, Pursuant to Rules 13a – 14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended			X	
						
32		Certification of Lynn M. Bamford, Chair and CEO, and K. Christopher Farkas, 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 30

SIGNATURE

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

CURTISS-WRIGHT CORPORATION
(Registrant)

By:     /s/ K. Christopher Farkas

K. Christopher Farkas
Vice President and Chief Financial Officer
Dated: May 4, 2023

Page 31

Exhibit 31.1

Certifications

I, Lynn M. Bamford, 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: May 4, 2023

/s/ Lynn M. Bamford
Lynn M. Bamford
Chair and Chief Executive Officer

Exhibit 31.2

Certifications

I, K. Christopher Farkas, 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: May 4, 2023

/s/ K. Christopher Farkas
K. Christopher Farkas
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 March 31, 2023 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Lynn M. Bamford, as Chair and Chief Executive Officer of the Company, and K. Christopher Farkas, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. section 1350, that to the best of their 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/ Lynn M. Bamford

Lynn M. Bamford
Chair and Chief Executive Officer
May 4, 2023

/s/ K. Christopher Farkas

K. Christopher Farkas
Vice President and Chief Financial Officer
May 4, 2023