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What changed in CURTISS WRIGHT CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CURTISS WRIGHT CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+284 added−259 removedSource: 10-K (2025-02-13) vs 10-K (2024-02-20)

Top changes in CURTISS WRIGHT CORP's 2024 10-K

284 paragraphs added · 259 removed · 222 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

56 edited+7 added−4 removed28 unchanged
Biggest changeWe utilize our Learning Management System to provide our employees online career-specific tools, training, and resources, and we also support development opportunities through educational institutions with our Tuition Assistance Program. Our early-in-career rotation program for new business leaders develops talent pipelines with both depth of skills and breadth of experiences that are critical to the company’s future talent needs.
Biggest changeOur employee development programs are designed to strengthen employee skills that align to our current and future business needs, encourage knowledge sharing and support career progression and growth. We utilize our Learning Management System to provide our employees online career-specific tools, training, and resources, and we also support development opportunities through educational institutions with our Tuition Assistance Program.
We maintain a Code of Conduct, an anti-harassment policy, and an equal employment opportunity policy, and provide training on these policies annually. We do business in more than 20 countries, and our employees operate across multiple cultures, functions, languages, and time zones to solve the technical and logistical challenges presented by its worldwide customer base.
We maintain a Code of Conduct (the Code), an anti-harassment policy, and an equal employment opportunity policy, and provide training on these policies annually. We do business in more than 20 countries, and our employees operate across multiple cultures, functions, languages, and time zones to solve the technical and logistical challenges presented by its worldwide customer base.
The businesses in this segment provide a diversified offering of highly engineered products and services including: (i.) industrial and specialty vehicle products, such as power management electronics, traction inverters, transmission shifters, and control systems, (ii.) sensors, controls, and electro-mechanical actuation components used on commercial and military aircraft, and (iii.) surface technology services, such as shot peening, laser peening, and engineered coatings utilized in both commercial and defense end market applications.
The businesses in this segment provide a diversified offering of highly engineered products and services including: (i.) industrial and specialty vehicle products, such as power management electronics, traction inverters, transmission shifters, and control systems, (ii.) sensors, controls, and electro-mechanical actuation components used on commercial and military applications, and (iii.) surface technology services, such as shot peening, laser peening, and engineered coatings utilized in both commercial and defense end market applications.
For the power & process markets, we provide a diversified offering of products for commercial nuclear power plants and nuclear equipment manufacturers, including hardware, valves, fastening systems, specialized containment doors, airlock hatches, and spent fuel management products supporting the continued performance, safety and modernization of operating reactors worldwide, though the majority of our products today support the maintenance of U.S. nuclear reactors.
For the power & process markets, we provide a diversified offering of products for commercial nuclear power plants and nuclear equipment manufacturers, including hardware, valves, fastening systems, specialized containment doors, airlock hatches, simulation equipment and spent fuel management products supporting the continued performance, safety and modernization of operating reactors worldwide, though the majority of our products today support the maintenance of U.S. nuclear reactors.
In the event of a termination for convenience by the government, there generally are provisions for recovery of our allowable incurred costs and a proportionate share of the profit or fee on the work completed, consistent with regulations of the U.S. Government. Fixed-price contracts usually provide that we absorb the majority of any cost overrun.
In the event of a termination for convenience by the government, there 6 generally are provisions for recovery of our allowable incurred costs and a proportionate share of the profit or fee on the work completed, consistent with regulations of the U.S. Government. Fixed-price contracts usually provide that we absorb the majority of any cost overrun.
We provide free annual biometric screening and health assessments at work or offsite, annual free flu shot clinics, a tobacco cessation program, weight management programs, and an employee assistance program, which offers advice on mental health, legal, and financial issues.
We provide free annual biometric screening and health 10 assessments at work or offsite, annual free flu shot clinics, a tobacco cessation program, weight management programs, and an employee assistance program, which offers advice on mental health, legal, and financial issues.
Culture We believe that our culture at Curtiss-Wright is just as essential as our products and services. Our culture impacts the quality of the employees we hire, the way we communicate and interact with our customers and each other, and our performance standards.
Company Culture We believe that our culture at Curtiss-Wright is just as essential as our products and services. Our culture impacts the quality of the employees we hire, the way we communicate and interact with our customers and each other, and our performance standards.
As a result, Curtiss-Wright is well positioned to take advantage of industry growth dynamics and secular trends that align with our strengths in attractive end markets. Our portfolio of highly competitive technologies is relied upon to improve safety, operating efficiency, and reliability, while meeting performance requirements in the most demanding environments.
As a result, we believe that Curtiss-Wright is well positioned to take advantage of industry growth dynamics and secular trends that align with our strengths in attractive end markets. Our portfolio of highly competitive technologies is relied upon to improve safety, operating efficiency, and reliability, while meeting performance requirements in the most demanding environments.
Employee Wellness 10 We are committed to the physical and mental health and wellness of our employees. We provide our employees and their families with access to a variety of health and wellness programs.
Employee Wellness We are committed to the physical and mental health and wellness of our employees. We provide our employees and their families with access to a variety of health and wellness programs.
Prior to this, he served as Vice President of Strategy and Communications of the Corporation from April 2015, and as Director and Vice President of Business Development for the Corporation’s former Controls division from 2006. 54 2022 Available information We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements for our annual stockholders’ meetings, as well as any amendments to those reports, with the Securities and Exchange Commission (SEC).
Prior to this, he served as Vice President of Strategy and Communications of the Corporation from April 2015, and as Director and Vice President of Business Development for the Corporation’s former Controls division from October 2006. 55 2022 Available information We file annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and proxy statements for our annual stockholders’ meetings, as well as any amendments to those reports, with the Securities and Exchange Commission (SEC).
Our equity-based incentive compensation plans ultimately act as a key lever for rewarding and retaining key employees, while also aligning the interests of our key employees and shareholders. See Note 16 to the Consolidated Financial Statements for more information regarding our equity-based incentive compensation plans.
Our equity-based incentive compensation plans ultimately act as a key lever for rewarding and retaining key employees, while also aligning the interests of our key employees and shareholders. See Note 15 to the Consolidated Financial Statements for more information regarding our equity-based incentive compensation plans.
OTHER INFORMATION Certain Financial Information For information regarding sales by geographic region, see Note 18 to the Consolidated Financial Statements contained in Part II, Item 8, of this Annual Report on Form 10-K.
OTHER INFORMATION Certain Financial Information For information regarding sales by geographic region, see Note 17 to the Consolidated Financial Statements contained in Part II, Item 8, of this Annual Report on Form 10-K.
She has held various leadership positions in the Corporation since 2004. She has been a Director of the Corporation since January 1, 2021. 60 2021 K. Christopher Farkas Vice President and Chief Financial Officer Vice President and Chief Financial Officer of the Corporation since May 2020.
She has held various leadership positions in the Corporation since 2004. She has been a Director of the Corporation since January 1, 2021. 61 2021 K. Christopher Farkas Vice President and Chief Financial Officer Vice President and Chief Financial Officer of the Corporation since May 2020.
As a result, we have varying degrees of platform-level content on fighter jets, helicopters, unmanned aerial vehicles (UAVs), ground combat equipment, tactical vehicles, and nuclear and non-nuclear surface ships and submarines, including a presence on more 5 than 325 platforms and more than 3,000 programs over the past 10 years.
As a result, we have varying degrees of platform-level content on fighter jets, helicopters, unmanned aerial vehicles (UAVs), ground combat equipment, tactical vehicles, and nuclear and non-nuclear surface ships and submarines, including a presence on more than 400 platforms and more than 3,000 programs over the past 10 years.
The defense businesses in this segment provide a diversified offering of products including commercial off-the-shelf (COTS) embedded computing board-level modules and processing equipment, data acquisition and flight test instrumentation equipment, integrated subsystems, instrumentation and control systems, tactical communications solutions for battlefield network management, and electronic stabilization products.
The defense businesses in this segment provide a diversified offering of products including COTS embedded computing board-level modules and processing equipment, data acquisition and flight test instrumentation equipment, integrated subsystems, instrumentation and control systems, tactical communications solutions for battlefield network management, and electronic stabilization products.
We have built upon those long-standing customer relationships and are deeply embedded in our customers workflows today. We hold competitive positions in the majority of our key defense and commercial end markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers.
We have built upon those long-standing customer relationships and are deeply embedded in our customers workflows today. We hold competitive positions where we are a leader in the majority of our key defense and commercial end markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers.
Government sales $ 1,314,770 $ 1,209,408 $ 1,249,677 Patents We own and license a number of United States and foreign patents and patent applications, which have been obtained or filed over a period of years. We also license intellectual property to and from third parties. Specifically, the U.S.
Government sales $ 1,496,436 $ 1,314,770 $ 1,209,408 Patents We own and license a number of United States and foreign patents and patent applications, which have been obtained or filed over a period of years. We also license intellectual property to and from third parties. Specifically, the U.S.
In addition, we furnish specialized and innovative severe-service valve technologies and services, heat exchanger repair, and piping test and isolation products to the oil and gas, chemical, petrochemical and industrial markets worldwide.
In the Process market, we furnish specialized and innovative severe-service valve technologies and services, heat exchanger repair, and piping test and isolation products to the oil and gas, chemical, petrochemical and industrial markets worldwide.
Government Sales Our sales to the U.S. Government and foreign government end use represented 56%, 54%, and 55% of total net sales during 2023, 2022, and 2021, respectively. In accordance with normal U.S. Government business practices, contracts and orders are subject to partial or complete termination at any time at the option of the customer.
Government and foreign government end use represented 57%, 56%, and 54% of total net sales during 2024, 2023, and 2022, respectively. In accordance with normal U.S. Government business practices, contracts and orders are subject to partial or complete termination at any time at the option of the customer.
Our Strategy Curtiss-Wright's Pivot to Growth strategy focuses on maximizing revenue, operating income, and free cash flow growth for our shareholders. It is built upon a strong foundation of operational and financial excellence where we strive for consistent growth in sales, operating margin, diluted earnings per share, and free cash flow.
We compete globally, primarily based on technology and pricing. Our Strategy Curtiss-Wright's Pivot to Growth strategy focuses on maximizing revenue, operating income, and free cash flow growth for our shareholders. It is built upon a strong foundation of operational and financial excellence where we strive for consistent growth in sales, operating margin, diluted earnings per share, and free cash flow.
Curtiss-Wright is differentiated because we have strength in the combined portfolio benefiting from long-term stability in our defense businesses and agility in our commercial businesses.
We believe that Curtiss-Wright is differentiated because of our strength in the combined portfolio, benefiting from long-term stability in our defense businesses and agility in our commercial businesses.
It is our policy to seek customary progress payments on certain contracts. Where we obtain such payments under U.S. Government prime contracts or subcontracts, the U.S. Government generally has control of the materials and work in process allocable or chargeable to the respective contracts.
It is our policy to seek customary progress payments on certain contracts. Where we obtain such payments under U.S. Government prime contracts or subcontracts, the U.S. Government generally has control of the materials and work in process allocable or chargeable to the respective contracts. Customers We have hundreds of customers in the various industries that we serve.
Discrimination is not tolerated at Curtiss-Wright. We are committed to high ethical standards and equal employment opportunities in all personnel actions, without regard to race, color, religion, gender, national origin, citizenship status, age, marital status, gender identity or expression, sexual orientation, physical or mental disability, or veteran status.
We are committed to high ethical standards and equal employment opportunities in all personnel actions, without regard to race, color, religion, gender, national origin, citizenship status, age, marital status, gender identity or expression, sexual orientation, physical or mental disability, or veteran status.
Curtiss-Wright has been involved in a number of “firsts” in industry, and since the origin of many of our markets, including commercial aerospace (our history dates back to the Wright Brothers and their historical first manned flight), naval nuclear power (presence on the first nuclear naval vessel) and commercial power (Curtiss-Wright’s products were in the first commercial nuclear power plant).
Curtiss-Wright has been involved in a number of “firsts” in industry, and since the origin of many of our markets, including commercial aerospace (our history dates back to the Wright Brothers and their historical first manned flight), naval nuclear power (presence on the first nuclear naval vessel), commercial power (our products were in the first commercial nuclear power plant) and defense electronics (use of commercial off-the-shelf (COTS) electronics in military applications).
Government, including both direct sales as a prime contractor and indirect sales as a subcontractor, is as follows: Year Ended December 31, (In thousands) 2023 2022 2021 Aerospace & Industrial $ 146,205 $ 151,528 $ 155,276 Defense Electronics 638,597 548,878 600,085 Naval & Power 529,968 509,002 494,316 Total U.S.
Government, including both direct sales as a prime contractor and indirect sales as a subcontractor, is as follows: Year Ended December 31, (In thousands) 2024 2023 2022 Aerospace & Industrial $ 167,509 $ 146,205 $ 151,528 Defense Electronics 711,538 638,597 548,878 Naval & Power 617,389 529,968 509,002 Total U.S.
We expect that the diversification and breadth of our portfolio should improve our competitive positions in our core markets, mitigate the impact of business cycles or economic volatility, and allow us to drive growth in new products and markets.
We expect that the breadth of our portfolio strengthens our competitive positions in core markets, mitigates the impact of business cycles or economic volatility, and allows us to drive growth in new products.
For the year ended December 31, 2023, our TRR and DART rates were 1.32 and 0.86 , respectively. For the year ended December 31, 2022, our TRR and DART rates were 1.69 and 1.04, respectively.
For the year ended December 31, 2024, our TRR and DART rates were 1.23 and 0.84, respectively. For the year ended December 31, 2023, our TRR and DART rates were 1.32 and 0.86, respectively.
We operate according to Curtiss-Wright’s Code of Conduct (the Code), which mandates full compliance with applicable laws and regulations and helps to preserve the integrity of our Company. The Code is available within the Corporate Governance section of the Company’s website at https://curtisswright.com/investor-relations/governance/default.aspx.
The Code mandates full compliance with applicable laws and regulations and helps to preserve the integrity of our Company. The Code is available within the Corporate Governance section of the Company’s website at https://curtisswright.com/investor-relations/governance/default.aspx. Talent Management Curtiss-Wright’s talent strategy is designed to maximize the full potential of our people and our business.
Our ability to provide mission critical, niche products and services on a cost-effective basis is fundamental to our strategy to drive increased value to our customers, which include 4 defense prime contractors, commercial aerospace original equipment manufacturers (OEMs), and numerous energy and manufacturing companies. We compete globally, primarily based on technology and pricing.
Our products are often in must-not-fail safety-critical 4 applications. Our ability to provide mission critical, niche products and services on a cost-effective basis is fundamental to our strategy to drive increased value to our customers, which include defense prime contractors, commercial aerospace original equipment manufacturers (OEMs), and numerous energy and manufacturing companies.
Approximately 46% of our total net sales for 2023, 47% for 2022, and 50% for 2021 were derived from contracts with agencies of, and prime contractors to, the U.S. Government. Information on our sales to the U.S.
No customer accounted for more than 10% of our total net sales during 2024, 2023, or 2022. Approximately 48% of our total net sales for 2024, 46% for 2023, and 47% for 2022 were derived from contracts with agencies of, and prime contractors to, the U.S. Government. Information on our sales to the U.S.
Prior to this, he served as Vice President of Finance from December 2017 and served as Vice President and Corporate Controller of the Corporation from September 2014. He also served as Assistant Corporate Controller of the Corporation from May 2009. 55 2014 Kevin M.
Prior to this, he served as Vice President of Finance from December 2017 and served as Vice President and Corporate Controller of the Corporation from September 2014. He also served as Assistant Corporate Controller of the Corporation from May 2009. 56 2014 Robert F. Freda Vice President and Treasurer Vice President and Treasurer of the Corporation since January 2021.
The defense businesses within our Defense Electronics segment are impacted primarily by government funding and spending, driven primarily by the U.S. Government, and supplemented by foreign defense spending (e.g. NATO countries). As a supplier of Modular Open Systems Approach (MOSA) based solutions, our products typically support government entities in the aerospace defense, ground defense, and naval defense industries.
The defense businesses within our Defense Electronics segment are impacted primarily by government funding and spending, driven primarily by the U.S. Government, and supplemented by foreign defense spending (e.g. NATO 5 countries). As a supplier of Modular Open Systems Approach (MOSA) based solutions, we are aligned with the best-in-class open standards-based architectures with the industry.
The production and service processes rest primarily within material modification, machining, assembly, and testing and inspection at commercial grade specifications. The businesses distribute products through commercial sales and marketing channels. Defense Electronics Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market.
The production and service processes rest primarily within material modification, machining, assembly, and testing and inspection at commercial grade specifications. The businesses distribute products through commercial sales and marketing channels.
In 2023, 2022, and 2021, our foreign operations as a percentage of pre-tax earnings were 35% , 39%, and 28%, respectively, adjusted for the loss on sale of our industrial valves business in Germany in 2022, along with an impairment on assets held for sale related to the German industrial valves business in 2021.
In 2024, 2023, and 2022, our foreign operations as a percentage of pre-tax earnings were 38% , 35%, and 39%, respectively, adjusted for the loss on sale of our industrial valves business in Germany in 2022. Government Sales Our sales to the U.S.
Our culture is the cornerstone representing our values, our behaviors, our way of working, and how we approach our business, which is based on strong relationships and a dedication to taking care of one another and our customers.
Our culture is the cornerstone representing our values, our behaviors, our way of working, and how we approach our business, which is based on strong relationships and a dedication to taking care of one another and our customers. Curtiss-Wright believes in an inclusive workforce, where various backgrounds are represented, engaged, and empowered to inspire and innovate.
The businesses in this segment typically market and distribute products through regulated government contracting channels. Naval & Power 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.
Naval & Power 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.
Rayment Vice President and Chief Operating Officer Vice President and Chief Operating Officer of the Corporation since April 1, 2021. Prior to this, he served as President of the Aerospace & Industrial segment (f/k/a Commercial/Industrial) of the Corporation from January 2020. He has held various leadership positions in the Corporation since 2004. 54 2021 Paul J.
Prior to this, he served as President of the Aerospace & Industrial segment (f/k/a Commercial/Industrial) of the Corporation from January 2020. He has held various leadership positions in the Corporation since 2004. 55 2021 John C. Watts Vice President of Strategy and Corporate Development Vice President of Strategy and Corporate Development of the Corporation since May 2022.
Prior to this, he served as Assistant Corporate Controller of the Corporation from June 2017 and also served as Director of Finance from September 2006. 56 2021 Gary A. Ogilby Vice President and Corporate Controller Vice President and Corporate Controller of the Corporation since May 2020.
Prior to this, he served as Assistant Corporate Controller of the Corporation from June 2017 and also served as Director of Finance from September 2006. 57 2021 George P. McDonald Vice President, General Counsel, and Corporate Secretary Vice President, General Counsel, and Corporate Secretary of the Corporation since November 2024.
Our succession plans are geared at retaining and promoting our existing employees to provide equal opportunity and access to promotion within the organization. Environmental, Health, and Safety The health, safety, and well-being of our employees, together with protection of the environment in the communities in which we operate, is a top priority for Curtiss-Wright.
Environmental, Health, and Safety The health, safety, and well-being of our employees, together with protection of the environment in the communities in which we operate, is a top priority for Curtiss-Wright.
Prior to this, he served as Vice President of Finance and Administration of the Company’s Surface Technologies division from November 2016. He also served as Assistant Corporate Controller of the Corporation from 2014. 42 2020 John C. Watts Vice President of Strategy and Corporate Development Vice President of Strategy and Corporate Development of the Corporation since May 2022.
Prior to this, he served as Vice President of Finance and Administration of the Company’s Surface Technologies division from November 2016. He also served as Assistant Corporate Controller of the Corporation from 2014. 43 2020 Kevin M. Rayment Vice President and Chief Operating Officer Vice President and Chief Operating Officer of the Corporation since April 1, 2021.
Amidst the evolving and, at times, challenging hiring environment, we apply agile recruiting methods as we work to adapt to the changing labor marketplace and to ensure employees and candidates have an exceptional experience. Diversity and Inclusion Curtiss-Wright believes in a diverse and inclusive workforce, where diverse backgrounds are represented, engaged, and empowered to inspire and innovate.
Amidst the evolving and, at times, challenging hiring environment, we apply agile recruiting methods as we work to adapt to the changing labor marketplace and to ensure employees and candidates have an exceptional experience.
For the naval defense market, we provide naval propulsion and auxiliary equipment, including main coolant pumps, power-dense compact motors, generators, steam turbines, valves, and secondary propulsion systems, primarily to the U.S. Navy. We also provide ship repair and maintenance for the U.S. Navy’s Atlantic and Pacific fleets through three service centers.
For the naval defense market, we provide naval propulsion and auxiliary equipment, including main coolant pumps, power-dense compact motors, generators, steam turbines, valves, and secondary propulsion systems, primarily to the U.S. Navy, most notably supporting the Virginia-class and Columbia-class submarine programs, as well as the Ford-class aircraft carrier program. We also provide ship repair and maintenance for the U.S.
Talent Management Curtiss-Wright’s talent strategy is designed to maximize the full potential of our people and our business. We are focused on providing an end-to-end experience from pre-hire to retirement. This includes creating inclusive, employee-centric experiences, cultivating leadership, offering multiple development pathways, and expanding the talent pipeline into and through the company.
We are focused on providing an end-to-end experience from pre-hire to retirement. This includes creating inclusive, employee-centric experiences, cultivating leadership, offering multiple development pathways, and expanding the talent pipeline into and through the company. We hold regular succession and career development reviews to ensure line of sight to talent at various levels of the organization.
The naval defense businesses in this segment are primarily impacted by government funding and spending on shipbuilding programs, primarily driven by the U.S. Government, and supplemented by foreign defense spending. For the aerospace defense market, we provide aircraft arresting systems equipment including energy absorbers, retractable hook cable systems, net-stanchion systems and mobile systems to support fixed land-based arresting systems.
For the aerospace defense market, we provide aircraft arresting systems equipment including energy absorbers, retractable hook cable systems, net-stanchion systems and mobile systems to support fixed land-based arresting systems.
Our 9 Technical Fellows program and our Innovation Council program is uniquely designed to cultivate technical, domain expertise and collaborative thought leadership for early through advanced career levels. As our Company continues to grow, we rely on an integrated talent acquisition approach. The Company strategically attracts, identifies, and onboards candidates in support of business needs and priorities.
As our Company continues to grow, we rely on an integrated talent acquisition approach. The Company strategically attracts, identifies, and onboards candidates in support of business needs and priorities.
We also utilize a strong and healthy balance sheet to implement a disciplined capital allocation strategy consisting of acquisitions as well as returns to shareholders through share repurchases and dividends, which will collectively drive long-term shareholder value. Business Segments We manage and evaluate our operations based on the products and services we offer and the different markets we serve.
We also utilize a strong and healthy balance sheet to implement a disciplined capital allocation strategy prioritized by acquisitions as well as returns to shareholders through share repurchases and dividends, which will collectively drive long-term shareholder value. Through the Pivot to Growth strategy, we are building strong momentum to compound sustained profitable growth.
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including our filings.
The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including our filings. These reports are also available free of charge through the Investor Relations section of our website at www.curtisswright.com as soon as reasonably practicable after we electronically file.
We also provide Reactor Coolant Pumps (RCPs) and control rod drive mechanisms for commercial nuclear power plants, most notably to support the Generation III+ Westinghouse AP1000 reactor design, as well as various nuclear reactor technologies supporting the design and deployment of numerous advanced Small Modular Reactors (SMRs).
Outside of the U.S., we principally support operating reactors in Canada and South Korea. In the new build market, we provide Reactor Coolant Pumps (RCPs) and control rod drive mechanisms for commercial nuclear power plants, most notably to support the Generation III+ Westinghouse AP1000 reactor design.
Aerospace & Industrial Sales in the Aerospace & Industrial segment are primarily generated from the general industrial and commercial aerospace markets and, to a lesser extent, the defense markets.
Defense Electronics Sales in the Defense Electronics segment are primarily to the defense markets, where we support government entities in aerospace defense, ground defense, and naval defense, and, to a lesser extent, the commercial aerospace market.
Based on this approach, we operate through three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. Our principal domestic manufacturing facilities are located in Arizona, California, New York, North Carolina, Ohio, Pennsylvania, and South Carolina, and internationally in Canada, Mexico, and the United Kingdom.
Our principal domestic manufacturing facilities are located in Arizona, California, New York, North Carolina, Ohio, Pennsylvania, and South Carolina, and internationally in Canada, Mexico, and the United Kingdom. Aerospace & Industrial Sales in the Aerospace & Industrial segment are primarily generated from the general industrial and commercial aerospace markets and, to a lesser extent, the defense markets.
These reports are also available free of charge through the Investor Relations section of our website at www.curtisswright.com as soon as reasonably practicable after we electronically file. 8 Human Capital At the end of 2023, we had approximately 8,600 employees in more than 20 countries, 6% of which are represented by labor unions and covered by collective bargaining agreements.
Human Capital 8 At the end of 2024, we had approximately 8,800 employees in more than 20 countries, 6% of which are represented by labor unions and covered by collective bargaining agreements.
We hold regular succession and career development reviews to ensure line of sight to talent at various levels of the organization. Succession plans are refreshed and reviewed to ensure a robust, diverse pipeline of talent and business continuity with a tight linkage to development.
Succession plans are refreshed and reviewed to ensure a robust, diverse pipeline of talent and business continuity with a tight linkage to development. 9 We focus on accelerating learning and development of our leaders by providing a combination of experiences and education.
Hundreds of leaders have honed their skills leveraging various learning modalities, including virtual and in-person instructor-led, web-based training and micro-courses to support our managers. Our employee development programs are designed to strengthen employee skills that align to our current and future business needs, encourage knowledge sharing and support career progression and growth.
Our New Business Leaders Program and Engineering Leadership Development Program offer developmental paths for new and experienced managers as well as engineers seeking to refresh or build their leadership capabilities. Hundreds of leaders have honed their skills leveraging various learning modalities, including virtual and in-person instructor-led, web-based training and micro-courses to support our managers.
We believe we are well positioned in the markets in which we operate as we seek to leverage and build upon our critical mass to expand our global manufacturing capabilities, sales channels and customer relationships.
We believe we are well positioned in the growing markets in which we operate and seek to grow our critical mass while expanding our global manufacturing capabilities, sales channels and customer relationships. Through One Curtiss-Wright, we continuously leverage the inherent synergies and cross-market technologies that exist throughout our portfolio of defense and commercial applications in support of continued profitable growth.
Prior to this, he served as Vice President of Human Resources of the Corporation from November 2011 and also served as Associate General Counsel and Assistant Secretary of the Corporation from June 1999 and May 2001, respectively. 56 2011 Robert F. Freda Vice President and Treasurer Vice President and Treasurer of the Corporation since January 2021.
Prior to this, he served as Deputy General Counsel from May 2024, and he served as Associate General Counsel of the Corporation from May 1999 to May 2024. 60 2024 Gary A. Ogilby Vice President and Corporate Controller Vice President and Corporate Controller of the Corporation since May 2020.
To foster a more diverse and inclusive culture, Curtiss-Wright is focused on (1) promoting a culture of diversity and inclusion that leverages the talents of all employees, and (2) implementing practices that attract, recruit, and retain diverse top talent.
We are focused on promoting a culture that best leverages the talents of all employees, as well as implementing practices that attract, develop, and retain top talent. Our succession plans are geared at retaining and promoting our existing employees to provide equal opportunity and access to promotion within the organization.
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Through One Curtiss-Wright, we also have inherent synergies with significant potential to build upon crossover applications for our defense and commercial technologies that leverage our teams’ collaborative efforts and the strength of our combined portfolio.
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Business Segments We manage and evaluate our operations based on the products and services we offer and the different markets we serve. Based on this approach, we operate through three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power.
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(See Notes 1, 5, and 6 to the Consolidated Financial Statements, contained in Part II, Item 8, of this Annual Report on Form 10-K). 6 Customers We have hundreds of customers in the various industries that we serve. No customer accounted for more than 10% of our total net sales during 2023, 2022, or 2021.
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Our businesses also benefit from outsourcing from defense primes (push towards affordability and standard open architecture) as well as our focus on total lifecycle management services and technology refreshes in defense electronics. The businesses in this segment typically market and distribute products through regulated government contracting channels.
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Ferdenzi Vice President, General Counsel, and Corporate Secretary Vice President, General Counsel, and Corporate Secretary of the Corporation since March 2014.
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Navy’s Atlantic and Pacific fleets and naval industrial base through three service centers. The naval defense businesses in this segment are primarily impacted by government funding and spending on shipbuilding programs, primarily driven by the U.S. Government, and supplemented by foreign defense spending, particularly for our aircraft handling equipment.
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We focus on accelerating learning and development of our leaders by providing a combination of experiences and education. Our New Business Leaders Program offers developmental paths for new and experienced managers seeking to refresh or build their leadership capabilities.
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We are also actively engaged and pursuing business on numerous advanced Small Modular Reactor (SMR) designs which are anticipated to serve numerous purposes ranging from generating electricity or creating process heat for industrial applications, to powering data centers.
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In addition, we are developing critical subsea pumping technology for the oil and gas industry, leveraging our experience and existing technology as a long-term producer of canned motor pumps for the U.S. nuclear Navy and commercial nuclear market.
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We strive to foster a working environment where all employees are treated with respect and dignity. Discrimination is not tolerated at Curtiss-Wright.
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Our early-in-career rotation program for new business leaders develops talent pipelines with both depth of skills and breadth of experiences that are critical to the company’s future talent needs. Our Technical Fellows program and our Innovation Council program is uniquely designed to cultivate technical, domain expertise and collaborative thought leadership for early through advanced career levels.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

39 edited+22 added−11 removed148 unchanged
Biggest changeThe airline industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer. Governmental agencies throughout the world, including the U.S. Federal Aviation Administration (FAA) and the European Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products.
Biggest changeThese protections and indemnifications, however, may not cover all of our liability that could arise in the performance of these services. The airline industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer. Governmental agencies throughout the world, including the U.S.
Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for several reasons, including: 12 • Encountering difficulties identifying and executing acquisitions; • Increased competition for targets, which may increase acquisition costs; • Consolidation in our industry, reducing the number of acquisition targets; • Competition laws and regulations preventing us from making certain acquisitions; and • Acquisition financing not being available on acceptable terms, or at all.
Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for several reasons, including: • Encountering difficulties identifying and executing acquisitions; 12 • Increased competition for targets, which may increase acquisition costs; • Consolidation in our industry, reducing the number of acquisition targets; • Competition laws and regulations preventing us from making certain acquisitions; and • Acquisition financing not being available on acceptable terms, or at all.
Doing business in foreign countries is subject to numerous risks, including without limitation: (a) political and economic instability and potential for social unrest; (b) the uncertainty of the ability of non-U.S. customers to finance purchases; (c) restrictions on the repatriation of funds; (d) restrictive trade policies; (e) tariff regulations; (f) difficulties in obtaining export and import licenses; (g) government financed competition; (h) changes in the local labor-relations climate; (i) economic conditions in local markets, including changes in inflation; (j) health concerns (including COVID-19 or any of its variants); (k) complying with foreign regulatory and tax requirements that are subject to change; and (l) limitations on our ability to enforce legal rights and remedies.
Doing business in foreign countries is subject to numerous risks, including without limitation: (a) political and economic instability and potential for social unrest; (b) the uncertainty of the ability of non-U.S. customers to finance purchases; (c) restrictions on the repatriation of funds; (d) restrictive trade policies; (e) tariff regulations; (f) difficulties in obtaining export and import licenses; (g) government financed competition; (h) changes in the local labor-relations climate; (i) economic conditions in local markets, including changes in inflation; (j) health concerns 18 (including COVID-19 or any of its variants); (k) complying with foreign regulatory and tax requirements that are subject to change; and (l) limitations on our ability to enforce legal rights and remedies.
Our business and facilities are subject to numerous federal, state, local, and foreign laws and regulations relating to the use, manufacture, storage, handling, and disposal of hazardous materials and other waste products used in the manufacturing of certain of our products or providing certain of our services, and we are subject to potentially significant fines or penalties, 16 including criminal sanctions, as well as facility shutdowns to address violations, and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges .
Our business and facilities are subject to numerous federal, state, local, and foreign laws and regulations relating to the use, manufacture, storage, handling, and disposal of hazardous materials and other waste products used in the manufacturing of certain of our products or providing certain of our services, and we are subject to potentially significant fines or penalties, including criminal sanctions, as well as facility shutdowns to address violations, and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges .
Failing to comply with these laws and regulations could have an adverse effect on our operating results. We may be subject to periodic litigation and regulatory proceedings, which may adversely affect our business and financial performance. From time to time, we are involved in lawsuits and regulatory actions brought or threatened against us in the ordinary course of business.
Failing to comply with these laws and regulations could have an adverse effect on our operating results. We may be subject to periodic litigation and regulatory proceedings, which may adversely affect our business and financial performance. 17 From time to time, we are involved in lawsuits and regulatory actions brought or threatened against us in the ordinary course of business.
In addition, on those contracts for which we are teamed with others and are not the prime contractor, the U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our services as a subcontractor. 15 Our U.S. Government contracts typically span one or more base years and multiple option years. The U.S.
In addition, on those contracts for which we are teamed with others and are not the prime contractor, the U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our services as a subcontractor. Our U.S. Government contracts typically span one or more base years and multiple option years. The U.S.
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax on global adjusted financial statement income and a 1% excise tax on share repurchases. Certain provisions of the IRA became effective in the beginning of fiscal 2023.
On August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law, with tax provisions primarily focused on implementing a 15% minimum corporate tax on global adjusted financial statement income and a 1% excise tax on share repurchases. Certain provisions of the IRA became effective in the beginning of fiscal 2023.
For a discussion regarding how our financial statements can be affected by pension and other postretirement benefit plans accounting policies, see “Management’s Discussion and Analysis—Critical Accounting Estimates and Policies—Pension and Other Postretirement Benefits” in Part II, Item 7 of this Form 10-K. Although U.S.
For a discussion regarding how our financial statements can be affected by pension and other 20 postretirement benefit plans accounting policies, see “Management’s Discussion and Analysis—Critical Accounting Estimates and Policies—Pension and Other Postretirement Benefits” in Part II, Item 7 of this Form 10-K. Although U.S.
Government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with our performance on the contract or does not receive funding to continue the program. U.S. Government procurement may adversely affect our cash flow or program profitability.
Government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with 15 our performance on the contract or does not receive funding to continue the program. U.S. Government procurement may adversely affect our cash flow or program profitability.
Our business benefits from free trade agreements such as the United States-Mexico-Canada Trade Agreement (USMCA) and relies on 20 various U.S. corporate tax provisions related to international commerce as we build, market, and sell our products globally.
Our business benefits from free trade agreements such as the United States-Mexico-Canada Trade Agreement (USMCA) and relies on various U.S. corporate tax provisions related to international commerce as we build, market, and sell our products globally.
Upon the occurrence of an event of default under our debt arrangements, after the expiration of any grace periods, our lenders could elect to declare 19 all amounts outstanding under our debt arrangements, together with accrued interest, to be immediately due and payable.
Upon the occurrence of an event of default under our debt arrangements, after the expiration of any grace periods, our lenders could elect to declare all amounts outstanding under our debt arrangements, together with accrued interest, to be immediately due and payable.
The criteria used to evaluate ESG practices may continue to evolve, which could result in greater expectations and may cause us to undertake costly initiatives to satisfy new 17 criteria and abide by any new disclosure requirements.
The criteria used to evaluate ESG practices may continue to evolve, which could result in greater expectations and may cause us to undertake costly initiatives to satisfy new criteria and abide by any new disclosure requirements.
For example, the COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus. The reduced air traffic applied financial pressures on airlines, who, in order to preserve cash and liquidity, dramatically reduced flight hours and delayed the purchases of new aircraft.
For example, the COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus. The reduced air traffic applied financial pressures on airlines, who, in order to preserve cash and liquidity, dramatically reduced flight hours and cancelled or delayed the purchases of new aircraft.
As of December 31, 2023, we had approximately $1.0 billion of debt outstanding. Our level of debt and debt servicing costs associated with that indebtedness, in part because of increases in interest rates on variable rate indebtedness under our revolving credit facility, could have significant consequences for our business.
As of December 31, 2024, we had approximately $1.0 billion of debt outstanding. Our level of debt and debt servicing costs associated with that indebtedness, in part because of increases in interest rates on variable rate indebtedness under our revolving credit facility, could have significant consequences for our business.
Many of our products and services are sold in highly competitive markets, and are affected by varying degrees of competition, including competition for hiring and retaining skilled labor. We compete against companies that often have higher sales volumes and greater financial, technological, research and development, human, and marketing resources than we have.
Many of our products and services are sold in highly competitive markets, and are affected by varying degrees of competition, including competition for hiring and retaining skilled labor. We compete against companies that often have higher sales volumes and greater financial, technological, research and development, human, and marketing resources, and larger customer bases than we have.
Although we currently generate significant operating cash flows, which combined with access to the credit markets provides us with significant discretionary funding capacity, global macroeconomic uncertainty, the ongoing trade disputes between the United States and China, the United Kingdom’s withdrawal from the European Union, armed conflicts around the world, such as those in Ukraine and Israel, and any conflict or threatened conflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), inflationary pressures, rising interest rates, labor shortages, global supply chain disruptions, and uncertainty regarding the stability of global credit and financial markets could affect our ability to fund our operations.
Although we currently generate significant operating cash flows, which combined with access to the credit markets provides us with significant discretionary funding capacity, global macroeconomic uncertainty, the ongoing trade disputes between the United States and China, armed conflicts around the world, such as those in Ukraine and Israel, and any conflict or threatened conflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), inflationary pressures, rising interest rates, labor shortages, global supply chain disruptions, and uncertainty regarding the stability of global credit and financial markets could affect our ability to fund 21 our operations.
Several of our facilities, because of their locations, could be subject to catastrophic loss caused by the aforementioned natural disasters. G lobal climate change may aggravate natural disasters and increase severe weather events that affect our business operations.
Several of our facilities, because of their locations, could be subject to catastrophic loss caused by the above mentioned natural disasters. G lobal climate change may aggravate natural disasters and increase severe weather events that affect our business operations.
RISKS RELATED TO MARKET CONDITIONS A substantial portion of our revenues and earnings depends upon the continued willingness of the U.S. Government and other customers in the defense industry to buy our products and services. In 2023, approximately 46% of our total net sales were derived from or related to U.S. defense programs.
RISKS RELATED TO MARKET CONDITIONS A substantial portion of our revenues and earnings depends upon the continued willingness of the U.S. Government and other customers in the defense industry to buy our products and services. In 2024, approximately 48% of our total net sales were derived from or related to U.S. defense programs.
See “Critical Accounting Estimates and Policies” in Part II, Item 7 of this Form 10-K. Our future financial results could be adversely impacted by asset impairment charges. As of December 31, 2023, we had goodwill and other intangible assets, net of accumulated amortization, of approximately $2.1 billion, which represented approximately 46% of our total assets.
See “Critical Accounting Estimates and Policies” in Part II, Item 7 of this Form 10-K. 19 Our future financial results could be adversely impacted by asset impairment charges. As of December 31, 2024, we had goodwill and other intangible assets, net of accumulated amortization, of approximately $2.3 billion, which represented approximately 46% of our total assets.
As such, substantially all amounts in backlog are funded. Backlog excludes unexercised contract options and potential orders under ordering type contracts (e.g. Indefinite Delivery / Indefinite Quantity). Backlog is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur. Backlog as of December 31, 2023 was $2.9 billion.
As such, substantially all amounts in backlog are funded. Backlog excludes unexercised contract options and potential orders under ordering type contracts (e.g. Indefinite Delivery / Indefinite Quantity). Backlog is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur. Backlog as of December 31, 2024 was $3.4 billion.
RISKS RELATED TO FINANCIAL MATTERS Political and economic changes in foreign countries and markets, including foreign currency fluctuations, may have a material effect on our operating results. During 2023, approximat ely 28% of ou r total net sales were to customers outside of the United States. Additionally, we also have operating facilities located in foreign countries.
RISKS RELATED TO FINANCIAL MATTERS Political and economic changes in foreign countries and markets, including foreign currency fluctuations, may have a material effect on our operating results. During 2024, approximat e ly 27% of ou r total net sales were to customers outside of the United States. Additionally, we also have operating facilities located in foreign countries.
Failure by Congress to further suspend or increase the debt ceiling could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments.
This could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments.
Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. We include documentation with our products sold to aircraft manufacturing customers certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries.
We include documentation with our products sold to aircraft manufacturing customers certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries.
A downturn in the aircraft market could adversely affect our business. 14 Our sales to large commercial aircraft manufacturers are cyclical in nature, and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns (inclusive of climate change), intense price competition, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, geopolitical events, conflicts and wars (including the Russia-Ukraine war and the Hamas-Israel war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside our control.
A downturn in the aircraft market could adversely affect our business. 14 Our sales to large commercial aircraft manufacturers, such as Boeing, Airbus, and related OEM suppliers, as well as manufacturers of business jets, are cyclical in nature, and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns (inclusive of climate change), intense price competition, high interest rates, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, labor strikes such as the International Association of Machinists and Aerospace workers union work stoppage at Boeing, geopolitical events, conflicts and wars (including the Russia-Ukraine war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside our control.
Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseen interruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war (including the Russia-Ukraine war and Israel-Hamas war), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, pandemic diseases such as COVID-19, or other events such as strikes by the workforce of a significant customer or supplier.
Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseen interruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war (including the Russia-Ukraine war), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, or other events such as strikes by the workforce of a significant customer or supplier (e.g., the International Association of Machinists and Aerospace workers union work stoppage at Boeing).
Although the World Health Organization and the U.S. federal government declared an end to COVID-19 as a global and national health emergency in May 2023, any future resurgence or development of new strains or variants of COVID-19, together with preventative measures taken to contain or mitigate such crises, could impact our business, operations and financial condition in a variety of ways, such as: (i) impact our customers such that the demand for our products and services could change; (ii) disrupt our supply chain and impact the ability of our suppliers to provide products or services as required; (iii) disrupt our ability to sell and provide our products and services and otherwise operate effectively; (iv) increase incremental costs resulting from the adoption of preventative measures and compliance with regulatory requirements; (v) create financial hardship on customers, including by creating restrictions on their ability to pay for our products and services; and (vi) result in closures of our facilities or the facilities of our customers or suppliers.
A pandemic, including COVID-19 or other epidemic or public health emergency, together with preventative measures taken to contain or mitigate such crises, could impact our business, operations and financial condition in a variety of ways, such as: (i) impact our customers such that the demand for our products and services could change; (ii) disrupt our supply chain and impact the ability of our suppliers to provide products or services as required; (iii) disrupt our ability to sell and provide our products and services and otherwise operate effectively; (iv) increase incremental costs resulting from the adoption of preventative measures and compliance with regulatory requirements; (v) create financial hardship on customers, including by creating restrictions on their ability to pay for our products and services; and (vi) result in closures of our facilities or the facilities of our customers or suppliers.
In addition, while our existing disaster recovery and business continuity plans, including those relating to our information technology systems are well designed, they may not be fully responsive to, or minimize losses associated with, catastrophic events.
In addition, while our existing disaster recovery and business continuity plans, including those relating to our information technology systems are well designed, they may not be fully responsive to, or minimize losses associated with, catastrophic events. As a result, any business disruption could negatively affect our business, operating results, or financial condition.
The United States and other countries have levied tariffs and taxes on certain goods (such as those implemented by the United States and China in recent years). Some of our products are included in these tariffs. All of this could lead to increased costs and diminished sales opportunities in the U.S. and abroad.
The United States and other countries have levied tariffs and taxes on certain goods, such as those implemented by the United States and China in recent years. Some of our products are included in these tariffs.
In December 2022, the European Union (EU) member states reached an agreement to implement the minimum tax component (Pillar Two) of the OECD’s tax reform initiative with certain aspects effective January 1, 2024, and other aspects effective January 1, 2025.
In December 2022, the European Union (EU) member states reached an agreement to implement the 15% minimum corporate tax component (Pillar Two) of the OECD’s tax reform initiative with certain aspects effective January 1, 2024, and other aspects effective January 1, 2025. Legislative changes to address Pillar Two are being adopted by taxing authorities in countries where we do business.
Media and political reactions in the affected countries could potentially exacerbate the impact on our operations in those countries. The imposition of new or increased tariffs, duties, border adjustment taxes or other trade restrictions by the United States could also result in the adoption of new or increased tariffs or other trade restrictions by other countries.
The imposition of new or increased tariffs, duties, border adjustment taxes or other trade restrictions by the United States could also result in the adoption of new or increased tariffs or other trade restrictions by other countries.
If consolidation of our competition continues to occur, we would expect the competitive pressures we face to increase.
Furthermore, we are facing increased international competition and cross-border 13 consolidation of competition. If consolidation of our competition continues to occur, we would expect the competitive pressures we face to increase.
U.S. lawmakers on several occasions have passed legislation to raise the federal debt ceiling, including the most recent suspension to the federal debt ceiling in June 2023, which is expected to allow the U.S. government to cover its debt obligations until at least January 1, 2025.
U.S. lawmakers on several occasions have passed legislation to raise the federal debt ceiling, including the suspension to the federal debt ceiling in June 2023, which allowed the U.S. government to cover its debt obligations until January 1, 2025. Because Congress failed to further suspend or increase the debt ceiling, the debt ceiling was reinstated on January 1, 2025.
Our businesses depend on suppliers and subcontractors for raw materials and components. At times subcontractors perform services that we provide to our customers. Our supply chain has been and may continue to be impacted by a wide variety of factors, including labor and material shortages as well as geopolitical events, such as China’s relationship with the United States and Taiwan.
Our supply chain has been and may continue to be impacted by a wide variety of factors, including labor and material shortages as well as geopolitical events, such as the Russia-Ukraine war, and China’s relationship with the United States and Taiwan.
The tariffs may in the future increase our cost of materials and may cause us to increase prices to our customers which we believe may reduce demand for our products. Our price increases may not be sufficient to fully offset the impact of the tariffs and result in lowering our margin on products sold.
Our price increases may not be sufficient to fully offset the impact of the tariffs and result in lowering our margin on products sold.
These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could significantly increase our costs and risks and reduce our profitability.
These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could significantly increase our costs and risks and reduce our profitability. A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, or debarment from bidding on contracts.
This would result in these customers supplying their own products or 13 services and competing directly with us for sales of these products or services, all of which could significantly reduce our revenues. Furthermore, we are facing increased international competition and cross-border consolidation of competition.
In addition, some of our largest customers could develop the capability to manufacture products or provide services similar to products that we manufacture or services that we provide. This would result in these customers supplying their own products or services and competing directly with us for sales of these products or services, all of which could significantly reduce our revenues.
Although we have generally enjoyed good relations with both our unionized and non-unionized employees, we may experience an adverse impact on our operating results if we are subject to labor actions.
Although we have generally enjoyed good relations with both our unionized and non-unionized employees, we may experience an adverse impact on our operating results if we are subject to labor actions. Future terror attacks, war (including the Russia-Ukraine war), natural disasters, climate change-related events, or other events beyond our control could adversely impact our businesses.
These actions and proceedings may involve claims for, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, or breach of contract. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings.
Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings.
In the event that one or more of our programs are reduced, delayed, or terminated for which we provide products and services, we may experience a reduction in our revenues and earnings and a material adverse effect on our business, financial condition, and results of operations.
Decreases in U.S. defense spending, changes in the allocation of defense spending, or the expiration or termination of certain aerospace and defense programs on which we have content could result in a reduction in our revenues and earnings and could have a material adverse effect on our business, financial condition, and results of operations.
Removed
In addition, some of our largest customers could develop the capability to manufacture products or provide services similar to products that we manufacture or services that we provide.
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To the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and produce advanced cybersecurity attacks, and vulnerabilities may be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers.
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U.S. defense spending has historically been cyclical, and defense budgets tend to rise when perceived threats to national security increase the level of concern over the country’s safety. At other times, spending by the military can decrease.
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Our businesses depend on suppliers and subcontractors for raw materials and components. At times subcontractors perform services that we provide to our customers.
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In August 2011, Congress enacted the Budget Control Act of 2011 (BCA), which imposed spending caps and certain reductions in defense spending over a ten-year period through 2021. These spending caps and reductions, referred to as sequestration, went into effect in March 2013.
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U.S. defense spending has historically been cyclical and is subject to periodic congressional action. The level of U.S. defense spending can vary and may be impacted by numerous outside factors, such as changes in the perceived threat environment, the U.S. Government’s budget deficits, spending priorities, and possible political pressure to reduce U.S.
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Through a series of bipartisan agreements, Congress has been able to temporarily lift discretionary spending limits every year through 2019.
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Government military spending, each of which could cause the Department of Defense budget to remain unchanged or to decline. Generally, an increase in the level of concern over the country’s safety tends to increase defense budgets. However, we cannot provide assurance that an increase in defense spending would benefit our business. At other times, spending by the military can decrease.
Removed
On August 2, 2019, the Bipartisan Budget Act of 2019 (BBA) was signed into law, which raised the BCA budget caps for both defense and non-defense discretionary spending in 2020 and 2021 and extended the mandatory BCA spending reductions through 2029. Absent additional legislative or other remedial action, the sequestration could require reduced U.S. federal government spending through fiscal 2029.
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The U.S. Department of the Treasury has announced that, since then, it has been using extraordinary measures to prevent the U.S. government’s default on its payment obligations, and to extend the time that the U.S. government has to raise its statutory debt limit, reinstate a suspension or otherwise resolve its funding situation.
Removed
As a result of this uncertainty, a decrease in U.S. Government defense spending or changes in spending allocation could result in one or more of our programs being reduced, delayed, or terminated.
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If extraordinary measures are exhausted prior to legislation being enacted to resolve the funding situation, the U.S. government may not be able to fulfill its funding obligations.
Removed
For example, changes to the FAR requirements for federal contractors proposed in November 2022 would require companies to make disclosure of annual greenhouse gas emissions and other disclosures to be deemed a responsible bidder on future government contracts. Such additional requirements could result in additional expense.
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Any significant disruption in the commercial nuclear power industry could adversely affect our business . Market demand for, and our ability to supply products and services to the commercial nuclear industry is dependent on the continued operation of nuclear power plants globally and, to a lesser extent, on the construction of new nuclear power plants.
Removed
A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, or debarment from bidding on contracts.
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A wide range of factors affect the continued operation and construction of nuclear power plants, including the political, regulatory and legal environment in which they operate, the availability and cost of alternative means of power generation, the occurrence of future nuclear incidents, such as the one which occurred at the Fukushima Daiichi nuclear plant in 2011, and general economic conditions.
Removed
While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, legislative changes to address Pillar Two are being adopted by taxing authorities in 18 other countries where we do business.
Added
Any reduction in demand for our commercial nuclear products and services in the U.S. or abroad could adversely affect our business, financial condition, and results of operations. Our nuclear business subjects us to various regulatory and financial risks.
Removed
Future terror attacks, war (including the Russia-Ukraine war and Israel-Hamas war), natural disasters, climate change-related events, pandemic diseases (such as COVID-19), or other events beyond our control could adversely impact our businesses.
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Our Naval & Power segment manufactures components for, and provide services to, customers in the nuclear power market, including utilities and certain governmental entities, and subjects us to various safety related requirements imposed by the U.S. Government, the Department of Energy, the Nuclear Regulatory Commission, and other agencies in foreign jurisdictions.
Removed
As a result, any business disruption could negatively affect our business, operating results, or financial condition. 21 The COVID-19 pandemic adversely impacted, and may in the future adversely impact, our business, operations, and financial results. The COVID-19 pandemic disrupted the global economy and adversely impacted certain elements of our business, including our supply chain, transportation networks, and production levels.
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In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down operations, depending on their assessment of the severity of the noncompliance. In addition, new or revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures.
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The Price-Anderson Act (“PPA”) promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S. Department of Energy (“DOE”) contractors for liabilities arising out of nuclear incidents at power plants licensed by the Nuclear Regulatory Commission (“NRC”) and at DOE nuclear facilities.
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That indemnification protects not only the NRC licensee or DOE prime contractor, but also others like us who may be doing work under contract or subcontract for a licensed power plant or under a DOE prime contract.
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The Price-Anderson Act indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry. If an incident or evacuation is not covered under the Price-Anderson Act’s indemnification provisions, we could be 16 held liable for damages, regardless of fault.
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In addition, if such indemnification authority is not applicable in the future, for instance, our business could be adversely affected if the owners and operators of nuclear power plants fail to retain our services in the absence of commercially adequate insurance and indemnification. We offer similar services in other jurisdictions outside the U.S.
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For those jurisdictions, varying levels of nuclear liability protection is provided by international treaties, and/or domestic laws, such as the Nuclear Liability and Compensation Act of Canada and the Nuclear Installations Act of the United Kingdom, insurance and/or assets of the nuclear installation operators (some of which are backed by governments) as well as under appropriate enforceable contractual indemnifications and hold-harmless provisions.
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Federal Aviation Administration (FAA) and the European Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries.
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These actions and proceedings may involve claims for, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, or breach of contract. We also may be subject to class action lawsuits, such as those involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws.
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The tariffs may in the future increase our cost of materials and may cause us to increase prices to our customers which we believe may reduce demand for our products in the U.S. and abroad. Media and political reactions in the affected countries could potentially exacerbate the impact on our operations in those countries.
Added
Pandemics, epidemics or other public health emergencies, such as the outbreak of COVID-19 may adversely impact our business, operations, and financial results.
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Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severely disrupt our operations and could have a material adverse effect on our business, operations, and financial results.
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As we cannot predict the duration, scope or severity of future public health crises, the negative financial impact to our results cannot be reasonably estimated and could be material. Item 1B. Unresolved Staff Comments. None.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+0 added−0 removed14 unchanged
Biggest changeIf a third-party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis. 22 The CIO plays a pivotal role in informing the Audit Committee, as well as our CEO and other members of our senior management team, including our Chief Financial Officer (CFO), COO, and General Counsel, on cybersecurity risks.
Biggest changeThe CIO plays a pivotal role in informing the Audit Committee, as well as our CEO and other members of our senior management team, including our Chief Financial Officer (CFO), COO, and General Counsel, on cybersecurity risks.
Our CIO, with over 25 years of experience leading cybersecurity oversight, brings a wealth of expertise and in-depth knowledge that is instrumental in developing and executing our cybersecurity program. Our cybersecurity program is fully integrated into the Company’s overall enterprise risk management program.
Our CIO, with over 25 years of experience leading cybersecurity 22 oversight, brings a wealth of expertise and in-depth knowledge that is instrumental in developing and executing our cybersecurity program. Our cybersecurity program is fully integrated into the Company’s overall enterprise risk management program.
In 2023, the Company achieved its primary cybersecurity risk management objective of no material cybersecurity incidents.
In 2024, the Company achieved its primary cybersecurity risk management objective of no material cybersecurity incidents.
The internal business owners of the hosted applications are required to provide a System and Organization Controls (SOC) 1 or SOC 2 report.
The internal business owners of the hosted applications are required to provide a System and Organization Controls (SOC) 1 or SOC 2 report. If a third-party vendor is not able to provide a SOC 1 or SOC 2 report, we take additional steps to assess their cybersecurity preparedness and assess our relationship on that basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe number and type of facilities utilized by each of our reportable segments are summarized below: Owned Facilities Location Aerospace & Industrial Defense Electronics Naval & Power Total North America 7 1 4 12 Europe 9 — — 9 Total 16 1 4 21 Leased Facilities Location Aerospace & Industrial Defense Electronics Naval & Power Total North America 42 16 27 85 Europe 15 5 6 26 Asia 9 1 1 11 Total 66 22 34 122 The buildings on the properties referred to in this Item are well maintained, in good condition, and are suitable and adequate for current needs.
Biggest changeThe number and type of facilities utilized by each of our reportable segments are summarized below: Owned Facilities Location Aerospace & Industrial Defense Electronics Naval & Power Total North America 7 1 5 13 Europe 9 — — 9 Total 16 1 5 22 Leased Facilities Location Aerospace & Industrial Defense Electronics Naval & Power Total North America 42 16 26 84 Europe 13 4 9 26 Asia 10 — 2 12 Total 65 20 37 122 The buildings on the properties referred to in this Item are well maintained, in good condition, and are suitable and adequate for current needs.
Item 2. Properties. Our corporate headquarters is located at a leased facility in Davidson, North Carolina. As of December 31, 2023, we had 147 facilities worldwide, consisting of 143 facilities associated with our reportable segments as well as four corporate and shared-services facilities.
Item 2. Properties. Our corporate headquarters is located at a leased facility in Davidson, North Carolina. As of December 31, 2024, we had 148 facilities worldwide, consisting of 144 facilities associated with our reportable segments as well as four corporate and shared-services facilities.
Approximately 83% of our facilities operate as manufacturing and engineering, metal treatment, or aerospace overhaul plants, while the remaining 17% operate as selling and administrative office facilities.
Approximately 86% of our facilities operate as manufacturing and engineering, metal treatment, or aerospace 23 overhaul plants, while the remaining 14% operate as selling and administrative office facilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough 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 consolidated financial condition, results of operations, and cash flows. 23 We have been named in pending lawsuits that allege injury from exposure to asbestos.
Biggest changeAlthough 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 consolidated financial condition, results of operations, and cash flows.
To date, we have not been found liable or paid any material sum of money in settlement in any asbestos-related case.
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeTotal 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 (in thousands) October 1 – October 31 21,978 $200.13 231,447 $158,375 November 1 – November 30 20,024 $209.66 251,471 154,177 December 1 – December 31 18,440 $218.93 269,911 150,140 For the quarter ended December 31 60,442 $209.02 269,911 $150,140 In November 2023, the Corporation adopted two written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.
Biggest changeTotal 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 October 1 – October 31 13,190 $347.85 468,554 $7,971,787 November 1 – November 30 10,789 $369.67 479,343 163,983,389 December 1 – December 31 286,728 $362.16 766,071 160,140,894 For the quarter ended December 31 310,707 $361.82 766,071 $160,140,894 In November 2024, the Corporation entered into two written trading plans under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Issuer Purchases of Equity Securities 25 The following table provides information about our repurchases 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 December 31, 2023.
Issuer Purchases of Equity Securities 25 The following table provides information about our repurchases 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 December 31, 2024.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION Our common stock is listed and traded on the New York Stock Exchange (NYSE) under the symbol CW. As of January 1, 2024, we had approximately 2,493 registered shareholders of our common stock, $1.00 par value.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. MARKET INFORMATION Our common stock is listed and traded on the New York Stock Exchange (NYSE) under the symbol CW. As of January 1, 2025, we had approximately 2,300 registered shareholders of our common stock, $1.00 par value.
DIVIDENDS During 2023 and 2022, the Company paid quarterly dividends as follows: 2023 2022 Common Stock First Quarter $ 0.19 $ 0.18 Second Quarter 0.20 0.19 Third Quarter 0.20 0.19 Fourth Quarter 0.20 0.19 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table sets forth information regarding our equity compensation plans as of December 31, 2023, the end of our most recently completed fiscal year: Plan category Number of securities to be issued under equity compensation plans Weighted-average fair value of outstanding equity-based awards Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) Equity compensation plans approved by security holders 356,766 (a) $139.36 1,613,185 (b) Equity compensation plans not approved by security holders None Not applicable Not applicable (a) Consists of 319,828 shares issuable upon vesting of performance share units, restricted shares, restricted stock units, and shares to non-employee directors under the 2005 and 2014 Omnibus Incentive Plan, and 36,938 shares issuable under the Employee Stock Purchase Plan.
DIVIDENDS During 2024 and 2023, the Company paid quarterly dividends as follows: 2024 2023 Common Stock First Quarter $ 0.20 $ 0.19 Second Quarter 0.21 0.20 Third Quarter 0.21 0.20 Fourth Quarter 0.21 0.20 SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS The following table sets forth information regarding our equity compensation plans as of December 31, 2024, the end of our most recently completed fiscal year: Plan category Number of securities to be issued under equity compensation plans Weighted-average fair value of outstanding equity-based awards Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) Equity compensation plans approved by security holders 280,175 (a) $189.80 1,449,505 (b) Equity compensation plans not approved by security holders None Not applicable Not applicable (a) Consists of 251,273 shares issuable upon vesting of performance share units, restricted shares, restricted stock units, and shares to non-employee directors under the 2024 Omnibus Incentive Plan, and 28,902 shares issuable under the Employee Stock Purchase Plan.
(b) Consists of 1,100,366 shares available for share-based awards under the 2014 Omnibus Incentive Plan, and 512,819 shares remaining available for issuance under the Employee Stock Purchase Plan.
(b) Consists of 990,839 shares available for share-based awards under the 2024 Omnibus Incentive Plan, and 458,666 shares remaining available for issuance under the Employee Stock Purchase Plan.
The graph assumes an investment of $100 on December 31, 2018 and the reinvestment of all dividends paid during the following five fiscal years. 26 Company / Index 2018 2019 2020 2021 2022 2023 Curtiss-Wright Corp 100 138.70 115.36 138.27 167.35 224.21 S&P MidCap 400 Index 100 126.20 143.44 178.95 155.58 181.15 S&P A&D Select Industry Index 100 139.79 148.81 152.86 145.61 180.68 Item 6. [Reserved]
The graph assumes an investment of $100 on December 31, 2019 and the reinvestment of all dividends paid during the following five fiscal years. 26 Company / Index 2019 2020 2021 2022 2023 2024 Curtiss-Wright Corp 100 83.17 99.69 120.65 161.65 258.20 S&P MidCap 400 Index 100 113.66 141.80 123.28 143.54 163.54 S&P A&D Select Industry Index 100 106.45 109.35 104.16 129.25 159.71 Item 6. [Reserved]
The second trading plan includes opportunistic share repurchases up to $100 million during 2024 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 November 28, 2023.
This written trading plan will take effect on January 2, 2025 and will cease on December 31, 2025. The terms of the trading plans can be found in the Corporation's Form 8-K filed with the U.S. Securities and Exchange Commission on November 19, 2024.
Removed
The Corporation implemented these written trading plans in connection with its previously authorized share repurchase program, of which approximately $150 million of the previously authorized up to $550 million remains available for repurchase. The first trading plan includes share repurchases of $50 million, to be executed equally throughout the 2024 calendar year.
Added
The Company implemented these written trading plans in connection with its previously announced share repurchase programs. The first trading plan will include purchases in the total amount of $60 million executed equally over the course of calendar year 2025. This written trading plan will take effect on January 2, 2025 and will cease on December 31, 2025.
Added
The second trading plan includes potential purchases in the total amount of $100 million. The Company cannot predict when or if it will purchase any shares of common stock as such plan includes a price limit where the Company would not buy shares under the Rule 10b5-1 plan.
Added
In December 2024, the Corporation entered into a written trading plan under Rule 10b5-1 of the Exchange Act. The Company implemented this written trading plan in connection with its previously announced share repurchase programs. The trading plan includes purchases in the total amount of $100 million.
Added
The number of shares of Company common stock to be purchased on any purchase day will be up to the maximum daily target volume allowable under Rule 10b-18 of the Exchange Act. The Corporation completed the entire $100 million of repurchases under this trading plan prior to December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Percent change (In thousands, except percentages) 2023 2022 2023 vs. 2022 Sales: Aerospace & Industrial $ 887,228 $ 836,035 6 % Defense Electronics 815,912 690,262 18 % Naval & Power 1,142,233 1,030,728 11 % Total sales $ 2,845,373 $ 2,557,025 11 % Operating income: Aerospace & Industrial $ 145,278 $ 136,996 6 % Defense Electronics 191,775 154,568 24 % Naval & Power 189,227 177,582 7 % Corporate and eliminations (41,678) (45,703) 9 % Total operating income $ 484,602 $ 423,443 14 % Interest expense 51,393 46,980 (9) % Other income, net 29,861 12,732 135 % Earnings before income taxes 463,070 389,195 19 % Provision for income taxes (108,561) (94,847) (14) % Net earnings $ 354,509 $ 294,348 20 % New orders $ 3,090,029 $ 2,942,550 5 % Backlog $ 2,873,243 $ 2,622,731 10 % Components of sales and operating income growth (decrease): 2023 vs. 2022 Sales Operating Income Organic 10 % 12 % Acquisitions 2 % — % Divestiture-related costs — % 1 % Foreign currency (1) % 1 % Total 11 % 14 % Sales for the year increased $288 million, or 11%, to $2,845 million, compared with the prior year period.
Biggest changeYear Ended December 31, Percent change (In thousands, except percentages) 2024 2023 2024 vs. 2023 Sales: Aerospace & Industrial $ 932,133 $ 887,228 5 % Defense Electronics 910,706 815,912 12 % Naval & Power 1,278,350 1,142,233 12 % Total sales $ 3,121,189 $ 2,845,373 10 % Operating income: Aerospace & Industrial $ 148,023 $ 145,278 2 % Defense Electronics 224,739 191,775 17 % Naval & Power 199,663 189,227 6 % Corporate and eliminations (43,828) (41,678) (5) % Total operating income $ 528,597 $ 484,602 9 % Interest expense 44,869 51,393 13 % Other income, net 38,328 29,861 28 % Earnings before income taxes 522,056 463,070 13 % Provision for income taxes (117,078) (108,561) (8) % Net earnings $ 404,978 $ 354,509 14 % New orders $ 3,696,442 $ 3,090,029 20 % Backlog $ 3,447,293 $ 2,873,243 20 % 32 Components of sales and operating income growth (decrease): 2024 vs. 2023 Sales Operating Income Organic 9 % 12 % Acquisitions — % — % Restructuring — % (3) % Foreign currency 1 % — % Total 10 % 9 % Sales for the year increased $276 million, or 10%, to $3,121 million, compared with the prior year period.
Based on this approach, we operate through three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. Impacts of inflation, pricing, and volume 27 Historically, we have not been significantly impacted by inflation, with increases in raw material costs or payroll costs generally offset through lean manufacturing activities or pricing initiatives.
Based on this approach, we operate through three reportable segments: Aerospace & Industrial, Defense Electronics, and Naval & Power. 27 Impacts of inflation, pricing, and volume Historically, we have not been significantly impacted by inflation, with increases in raw material costs or payroll costs generally offset through lean manufacturing activities or pricing initiatives.
While we closely monitor these industry metrics, our success and future growth in the commercial aerospace market is primarily tied to the growth in aircraft production rates (e.g., Boeing 737 and 787, Airbus A320 and A350), the timing of our 29 order placement, and continued partnering with aerospace OEMs on both the current fleet and the next-generation of single aisle programs and engines, as well as emerging opportunities to support more fuel efficient and all-electric aircraft.
While we closely monitor these industry metrics, our success and future growth in the commercial aerospace market is primarily tied to the growth in aircraft production rates (e.g., Boeing 737 and 787, Airbus A320 and A350), the timing of our order placement, and continued partnering with aerospace OEMs on both the current fleet and the next-generation of single aisle programs and engines, as well as emerging opportunities to support more fuel efficient and all-electric aircraft.
In addition, through our service centers, we are a provider of ship repair and maintenance for the U.S. Navy’s Atlantic and Pacific fleets. In the aerospace defense market, we expect to benefit from increased funding levels on Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR), electronic warfare, encryption, unmanned systems, and communications programs.
In addition, through our service centers, we are a provider of ship repair and maintenance for the U.S. Navy’s Atlantic and Pacific fleets. In the aerospace defense market, we expect to benefit from 28 increased funding levels on Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance (C5ISR), electronic warfare, encryption, unmanned systems, and communications programs.
Other Intangible Assets Other intangible assets are generally the result of acquisitions and consist primarily of purchased technology, customer related intangibles, and trademarks. Intangible assets are recorded at their fair values as determined through purchase accounting, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from 41 follow-on sales.
Other Intangible Assets Other intangible assets are generally the result of acquisitions and consist primarily of purchased technology, customer related intangibles, and trademarks. Intangible assets are recorded at their fair values as determined through purchase accounting, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from follow-on sales.
We also continue to seek additional opportunities in China and India. Backed by strong funding and legislative support, the U.S. Department of Energy has allocated $3.2 billion for advanced nuclear through its Advanced Reactor Demonstration Program (ARDP) to accelerate the development and demonstration of SMRs and advanced reactors through cost-shared partnerships with U.S. industry.
We also continue to seek opportunities in the U.S., China and India. Backed by strong funding and legislative support, the U.S. Department of Energy has allocated $3.2 billion for advanced nuclear through its Advanced Reactor Demonstration Program (ARDP) to accelerate the development and demonstration of SMRs and advanced reactors through cost-shared partnerships with U.S. industry.
The rate of compensation increase for base pay in the pension plans remained unchanged at a weighted average of 3.4% for the current period, based upon a graded scale of 4.1% to 2.9% that decrements as pay increases, which reflects the experience over past years and the Company’s expectation of future salary increases.
The rate of compensation increase for base pay in the pension plans remained unchanged at a weighted average of 3.39% for the current period, based upon a graded scale of 4.1% to 2.9% that decrements as pay increases, which reflects the experience over past years and the Company’s expectation of future salary increases.
According to a 2022 Nuclear Energy Institute (NEI) survey, its member utilities see a role for more than 90 gigawatts of nuclear power in support of their 30 decarbonization goals, which translates to the potential for 300 new SMRs by 2050, and represents only a fraction of the potential global demand for these technologies.
According to a 2022 Nuclear Energy Institute (NEI) survey, its member utilities see a role for more than 90 gigawatts of nuclear power in support of their decarbonization goals, which translates to the potential for 300 new SMRs by 2050, and represents only a fraction of the potential global demand for these technologies.
As a supplier of COTS and COTS+ solutions, we continue to demonstrate that defense electronics technology will enhance our ability to design and develop future 28 generations of advanced systems and products for high performance applications, while also meeting the military’s Size, Weight, and Power considerations.
As a supplier of COTS and COTS+ solutions, we continue to demonstrate that defense electronics technology will enhance our ability to design and develop future generations of advanced systems and products for high performance applications, while also meeting the military’s size, weight, and power considerations.
Application of an over-time revenue recognition method requires the use of reasonable and dependable estimates of future material, labor, and overhead costs that will be incurred as well as a disciplined cost estimating system in which all functions of the business are integrally involved.
Application of an over-time revenue recognition method requires the use of reasonable 39 and dependable estimates of future material, labor, and overhead costs that will be incurred as well as a disciplined cost estimating system in which all functions of the business are integrally involved.
We also retained the MP-2021 projected mortality scale published in October 2021, with no pandemic adjustments. The overall expected return on assets assumption is based primarily on the expectations of future performance. Expected future performance is determined by weighting the expected returns for each asset class by the plan’s asset allocation.
We also retained the MP-2021 projected mortality scale published in October 2021, with no pandemic adjustments. 40 The overall expected return on assets assumption is based primarily on the expectations of future performance. Expected future performance is determined by weighting the expected returns for each asset class by the plan’s asset allocation.
We continue to grow our exposure in this market, and are actively engaged with all the major reactor designers to develop partnerships and secure content for the design and development of critical systems and equipment expected to be deployed globally.
We continue to grow our exposure in this market, and are actively engaged with all major 300MW+ reactor designers to develop partnerships and secure content for the design and development of critical systems and equipment expected to be deployed globally.
Defense Electronics Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market. The following tables summarize sales, operating income and margin, new orders, and backlog within the Defense Electronics segment.
Defense Electronics Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market. 34 The following tables summarize sales, operating income and margin, new orders, and backlog within the Defense Electronics segment.
However, in recent history, we have experienced heightened pressures in our costs of material, labor, and services consistent with the overall rates of inflation in the wake of the COVID-19 pandemic.
However, in recent history, we have experienced heightened pressures in our costs of material, services, and especially labor, consistent with the overall rates of inflation in the wake of the COVID-19 pandemic.
As a result, and including recent acquisitions, Curtiss-Wright’s total direct foreign military sales represent approximately 9% of the Corporation's total net sales. Commercial Aerospace Curtiss-Wright derives revenue from the global commercial aerospace market, principally to the commercial jet market, and to a lesser extent the regional jet, business jet, and commercial helicopter markets.
As a result, and including recent acquisitions, Curtiss-Wright’s total direct foreign military sales represent approximately 9% of the Corporation’s total revenues. Commercial Aerospace Curtiss-Wright derives revenue from the global commercial aerospace market, principally to the commercial jet market, and to a lesser extent the regional jet, business jet, and commercial helicopter markets.
We also play an important role in the new build market for the Generation III+ Westinghouse AP1000 reactor design, for which we are a supplier of reactor coolant pumps, as well as a variety of ancillary plant products and services. On a global basis, nuclear plant construction remains active.
We also play a significant role in the new build market for the Generation III+ Westinghouse AP1000 reactor design, for which we are a supplier of reactor coolant pumps, as well as a variety of ancillary plant products and services. On a global basis, nuclear plant construction remains active.
RESULTS OF OPERATIONS The following MD&A is intended to help the reader understand the results of operations and financial condition of the Corporation for the year ended December 31, 2023, as compared to the year ended December 31, 2022.
RESULTS OF OPERATIONS The following MD&A is intended to help the reader understand the results of operations and financial condition of the Corporation for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Contracts that qualify for over-time revenue recognition are generally associated with the design, development, and manufacture of highly engineered industrial products used in commercial and defense applications and generally span between 2-5 years in duration. Revenue recognized on an over-time basis for the year ended December 31, 2023 accounted for approximately 47% of total net sales.
Contracts that qualify for over-time revenue recognition are generally associated with the design, development, and manufacture of highly engineered industrial products used in commercial and defense applications and generally span between 2-5 years in duration. Revenue recognized on an over-time basis for the year ended December 31, 2024 accounted for approximately 49% of total net sales.
Based upon the completion of our annual test as of October 31, 2023, we determined that there was no impairment of goodwill and that all reporting units’ estimated fair values were substantially in excess of their carrying amounts.
Based upon the completion of 41 our annual test as of October 31, 2024, we determined that there was no impairment of goodwill and that all reporting units’ estimated fair values were substantially in excess of their carrying amounts.
Similar to the U.S., as international plants age, we foresee opportunities to help solve operators’ needs to prevent obsolescence through plant safety and technology upgrades, plant life extensions, and upgrades of computer systems, and we continue to build upon our relationships throughout Canada, Europe, and South Korea, among others.
Outside of the U.S. market, as international plants age, we foresee numerous opportunities to help solve operators’ needs to prevent obsolescence through plant safety and technology upgrades, plant life extensions, and upgrades of computer systems, and we continue to build upon our relationships throughout Canada, Europe and South Korea, among others.
Goodwill We have $1.6 billion in goodwill as of December 31, 2023. Generally, the largest separately identifiable asset from the businesses that we acquire is the value of their assembled workforces, which includes the additional benefit received from management, administrative, marketing, business development, engineering, and technical employees of the acquired businesses.
Goodwill We have $1.7 billion in goodwill as of December 31, 2024. Generally, the largest separately identifiable asset from the businesses that we acquire is the value of their assembled workforces, which includes the additional benefit received from management, administrative, marketing, business development, engineering, and technical employees of the acquired businesses.
Debt Compliance As of December 31, 2023, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization ratio limit of 60%. As of December 31, 2023, we had the ability to incur total additional indebtedness of $2.3 billion without violating our debt to capitalization covenant.
Debt Compliance As of December 31, 2024, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization ratio limit of 60%. As of December 31, 2024, we had the ability to incur total additional indebtedness of $2.5 billion without violating our debt to capitalization covenant.
Discussion and analysis of our financial condition and results of operations for the year ended December 31, 2022, as compared to the year ended December 31, 2021, is contained in our 2022 Annual Report on Form 10-K, filed with the SEC on February 22, 2023.
Discussion and analysis of our financial condition and results of operations for the year ended December 31, 2023, as compared to the year ended December 31, 2022, is contained in our 2023 Annual Report on Form 10-K, filed with the SEC on February 20, 2024.
Currently, more than 50% of our sales in this market are linked to the narrow-body market. We provide a combination of critical equipment, including flight controls, actuation, high-temperature and high accuracy sensors, and other sophisticated electronics, as well as shot and laser peening services utilized on highly stressed components of turbine engine fan blades and aircraft structures.
Currently, approximately 60% of our sales in this market are linked to the narrow-body market. We provide a combination of critical equipment, including flight controls, actuation, high-temperature and high accuracy sensors, and other sophisticated electronics, as well as shot and laser peening and coatings services utilized on highly stressed components of turbine engine fan blades and aircraft structures.
In 2023, the U.S. market experienced strong bipartisan support for nuclear power, with significant investments through the Civil Nuclear Credit Program (part of the Infrastructure Bill) and nuclear power production tax credits (provided by the Inflation Reduction Act) focused on helping to preserve the existing U.S. reactor fleet.
The U.S. market continues to experience strong bipartisan support for nuclear power, with significant investments through the Civil Nuclear Credit Program (part of the Infrastructure Bill) and nuclear power production tax credits (provided by the Inflation Reduction Act) focused on helping to preserve the existing U.S. reactor fleet.
The expected returns are based on long-term capital market assumptions provided by our investment consultants. Based on a review of market trends, actual returns on plan assets, and other factors, the Company’s expected long-term rate of return on plan assets was increased to 6.75% as of December 31, 2023, which will be utilized for determining 2024 pension cost.
The expected returns are based on long-term capital market assumptions provided by our investment consultants. Based on a review of market trends, actual returns on plan assets, and other factors, the Company’s expected long-term rate of return on plan assets was increased to 7.25% as of December 31, 2024, which will be utilized for determining 2025 pension cost.
Interest cost is determined by applying the spot rate from the full yield curve to each anticipated benefit payment. The discount rate changes contributed to an increase in the benefit obliga tion of $12 million in the CW plans.
Interest cost is determined by applying the spot rate from the full yield curve to each anticipated benefit payment. The discount rate changes contributed to an decrease in the benefit obliga tion of $41 million in the CW plans.
Through One Curtiss-Wright, we are also well positioned to build upon crossover applications for our defense and commercial market technologies that leverage our teams’ collaborative efforts and the strength of our combined portfolio. We manage and evaluate our operations based on the products and services we offer and the different markets we serve.
Through One Curtiss-Wright, we are also well positioned to continuously leverage our teams’ collaborative efforts and the strength of our combined portfolio, while also seeking to build upon crossover applications that may exist across our defense and commercial market technologies. We manage and evaluate our operations based on the products and services we offer and the different markets we serve.
Revolving Credit Agreement As of December 31, 2023, we had no borrowings outstanding under the Credit Agreement and $20 million in letters of credit supported by the credit facility. The unused credit available under the Credit Agreement as of December 31, 2023 was $730 million, which could be borrowed in full without violating any of our debt covenants.
Revolving Credit Agreement As of December 31, 2024, we had no borrowings outstanding under the Credit Agreement and $21 million in letters of credit supported by the credit facility. The unused credit available under the Credit Agreement as of December 31, 2024 was $729 million, which could be borrowed in full without violating any of our debt covenants.
The following table reflects the impact of changes in selected assumptions used to determine the funded status of the Company’s U.S. qualified and nonqualified pension plans as of December 31, 2023 (in thousands, except for percentage point change): Assumption Percentage Point Change Increase in Benefit Obligation Increase/(Decrease) in Expense Discount rate (0.25) % $17,163 ($256) Expected return on assets (0.25) % — $2,255 See Note 17 to the Consolidated Financial Statements for further information on our pension and postretirement plans.
The following table reflects the impact of changes in selected assumptions used to determine the funded status of the Company’s U.S. qualified and nonqualified pension plans as of December 31, 2024 (in thousands, except for percentage point change): Assumption Percentage Point Change Increase in Benefit Obligation Increase/(Decrease) in Expense Discount rate (0.25) % $14,790 ($297) Expected return on assets (0.25) % — $2,279 See Note 16 to the Consolidated Financial Statements for further information on our pension and postretirement plans.
Our primary focus is OEM products and services for commercial jets, which represents more than 80% of our sales in this market, and is highly dependent on new aircraft production from our primary customers, Boeing and Airbus. We have significant content on the majority of the commercial aircraft programs, including both narrow-body and wide-body aircraft.
Our primary focus is OEM products and services for commercial jets, which represent approximately 90% of our sales in this market, and are highly dependent on new aircraft production from our primary customers, Boeing and Airbus. We have significant content on the majority of the commercial aircraft programs, including both narrow-body and wide-body aircraft.
On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $51 million, $126 million, and $111 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.
On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $45 million, $95 million, and $136 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.
While all companies are subject to economic risk, 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.
While all companies are subject to economic risk, 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.
The loss in the prior period was primarily attributed to lower asset returns, partially offset by increases in the discount rate. Foreign currency translation adjustments during the year ended December 31, 2023 resulted in a comprehensive gain of $38 million, compared to a comprehensive loss of $61 million in the comparable prior period.
The gain in the prior period was primarily attributed to higher asset returns, partially offset by decreases in the discount rate. Foreign currency translation adjustments during the year ended December 31, 2024 resulted in a comprehensive loss of $44 million, compared to a comprehensive gain of $38 million in the comparable prior period.
The discount rate used to determine the plan benefit obligations as of December 31, 2023, and the annual periodic costs for 2024, was decreased from 5.04% to 4.86% for the Curtiss-Wright Pension Plan, and from 4.99% to 4.79% for the nonqualified benefit plan, to reflect current economic conditions.
The discount rate used to determine the plan benefit obligations as of December 31, 2024, and the annual periodic costs for 2025, was increased from 4.86% to 5.55% for the Curtiss-Wright Pension Plan, and from 4.79% to 5.46% for the nonqualified benefit plan, to reflect current economic conditions.
Over the prior decade, there was an extended production up-cycle for the commercial aerospace market, which was driven by increases in production by Boeing and Airbus on both legacy and new aircraft, particularly narrow-body aircraft. Additionally, sustained low oil prices contributed to declining fuel prices, which in turn led to cheaper airfares for consumers and increased passenger growth.
The prolonged production up-cycle experienced in the prior decade was driven by increases in production by Boeing and Airbus on both legacy and new aircraft, particularly narrow-body aircraft. 29 Additionally, sustained low oil prices contributed to declining fuel prices, which in turn led to cheaper airfares for consumers and increased passenger growth.
New orders increased $100 million as compared to the prior year, primarily due to an increase in orders for tactical communications as well as embedded computing products. Naval & Power 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.
New orders increased $120 million as compared to the prior year, primarily due to an increase in orders for avionics and embedded computing equipment. Naval & Power 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.
Contract liabilities primarily consist of customer advances received prior to revenue being earned. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Consolidated Balance Sheet. Inventory Inventory costs include materials, direct labor, purchasing, and manufacturing overhead costs, which are stated at the lower of cost or net realizable value.
Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Consolidated Balance Sheet. Inventory Inventory costs include materials, direct labor, purchasing, and manufacturing overhead costs, which are stated at the lower of cost or net realizable value.
Meanwhile, our surface treatment services, which include shot and laser peening, engineered coatings, and analytical testing services across an extensive global network, are used to increase the safety, reliability, and longevity of components operating in harsh environments. Sales are primarily driven by global demand from general industrial customers.
Meanwhile, our surface treatment services, which include shot and laser peening, engineered coatings, and analytical testing services across an extensive global network, are used to increase the safety, reliability, and longevity of components operating in harsh environments.
We have consistently focused on mitigating inflation through pricing and operational excellence initiatives, and generally have been able to offset these cost increases, as a portion of our contracts contain terms and conditions that enable us to pass inflationary price increases to our customers. In those cases whereby inflationary increases are not contractually stipulated, we actively negotiate price increases.
We have consistently focused on mitigating inflation through pricing and operational excellence initiatives, and generally have been able to offset these cost increases, as a portion of our contracts contain terms and conditions that enable us to pass inflationary price increases to our customers.
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.
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.
Analytical Definitions Throughout MD&A, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact that acquisitions and divestitures had on the current year results.
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 that acquisitions and divestitures had on the current year results.
As of December 31, 2022, we had no borrowings outstanding under the Credit Agreement. Repurchase of Common Stock During 2023, the Company repurchased approximately 0.3 million shares of its common stock for $50 million.
As of December 31, 2023, we had no borrowings outstanding under the Credit Agreement. Repurchase of Common Stock During 2024, the Company repurchased approximately 766,000 shares of its common stock for $250 million. In 2023, the Company repurchased approximately 270,000 shares of its common stock for $50 million.
Defense We have a well-diversified portfolio of products and services that supply all branches of the U.S. military, with content on critical high-performance programs and platforms, as well as a growing international defense business. A significant portion of our defense business operations is comprised of long-term programs and contracts driven primarily by U.S. DoD budgets and funding levels.
Our portfolio of products and services supplies all branches of the U.S. military, where our content is on critical high-performance programs and platforms, and also supports a growing international defense business. A significant portion of our defense business operations is comprised of long-term programs and fixed-price contracts driven primarily by U.S. DoD budgets and funding levels.
According to the Nuclear Regulatory Commission (NRC), nuclear power comprises approximately 20% of all electric power produced in the U.S. today, with 93 reactors (includes the recently started Vogtle 3 reactor) operating across 54 nuclear power plants in 28 states.
According to the Nuclear Regulatory Commission (NRC), nuclear power comprises approximately 20% of all electric power produced in the U.S. today, with 94 reactors (including both Vogtle 3 and 4 AP1000 reactors) operating across 54 nuclear power plants in 28 states.
Comprehensive income (loss) Pension and postretirement adjustments within comprehensive income during the year ended December 31, 2023 were a $8 million gain, compared to a $7 million loss for the prior year period. The gain in the current period was primarily attributed to higher asset returns, partially offset by decreases in the discount rate.
Comprehensive income (loss) Pension and postretirement adjustments within comprehensive income during the year ended December 31, 2024 were a $14 million gain, compared to a $8 million gain for the prior year period. The gain in the current period was primarily attributed to increases in the discount rate.
According to industry reports, global travel demand is expected to fully recover and exceed pre-pandemic levels in 2024, though rising inflation and higher oil prices all remain watch items for the commercial aero industry going forward.
According to industry reports, global travel demand reached a record high in 2024 and fully recovered to pre-pandemic levels, though high levels of inflation and higher oil prices remain watch items for the commercial aero industry going forward.
We have consistently made annual investments in capital that deliver efficiencies and cost savings, while continuing to focus on negotiating better contract terms, especially on long-term agreements.
In those cases whereby inflationary increases are not contractually stipulated, we aim to actively negotiate price increases. We have consistently made annual investments in capital that deliver efficiencies and cost savings, while continuing to focus on negotiating better contract terms, especially on long-term agreements.
As of December 31, 2023, we had contingent liabilities on outstanding letters of credit due as follows: (In thousands) Total 2024 2025 2026 2027 2028 Thereafter Letters of Credit (1) $ 19,866 $ 15,013 $ 4,504 $ 197 $ 152 $ — $ — (1) Amounts exclude bank guarantees of approximately $16.0 million.
As of December 31, 2024, we had contingent liabilities on outstanding letters of credit due as follows: (In thousands) Total 2025 2026 2027 2028 2029 Thereafter Letters of Credit (1) $ 21,003 $ 10,710 $ 4,075 $ 6,131 $ — $ — $ 87 (1) Amounts exclude bank guarantees of approximately $15.0 million.
Investing Activities Capital Expenditures Our capital expenditures were $45 million and $38 million for 2023 and 2022, respectively, primarily due to higher capital spending in the Naval & Power segment during the current period. Divestitures No material divestitures took place during 2023.
Investing Activities Capital Expenditures Our capital expenditures were $61 million and $45 million for 2024 and 2023, respectively, primarily due to higher capital spending in the Defense Electronics and Naval & Power segments during the current period. Divestitures No material divestitures took place during 2024 or 2023. Acquisitions In 2024, we acquired two businesses for $226 million.
The increase in cash held by U.S. subsidiaries during 2023 as compared to 2022 was primarily due to higher cash from operations in the current period as well as no acquisition activity during the current period.
The decrease in cash held by U.S. subsidiaries during 2024 as compared to 2023 was primarily due to acquisition activity during the current period. The increase in cash held by foreign subsidiaries during 2024 as compared to 2023 was primarily due to lower foreign cash repatriation during the current period.
An expected long-term rate of return of 6.50%% was used for determining 2023 expense, with 5.75% used for 2022 pension expense and 6.50% used for 2021 pension expense. 40 The timing and amount of future pension income or expense to be recognized each year is dependent on the demographics and expected compensation of the plan participants, the expected interest rates in effect in future years, inflation, and the actual and expected investment returns of the assets in the pension trust.
The timing and amount of future pension income or expense to be recognized each year is dependent on the demographics and expected compensation of the plan participants, the expected interest rates in effect in future years, inflation, and the actual and expected investment returns of the assets in the pension trust.
Capital Resources Cash in U.S. and Foreign Jurisdictions As of December 31, (In thousands) 2023 2022 United States of America $ 230,298 $ 147,851 United Kingdom 72,342 48,203 Canada 35,736 33,268 European Union 22,950 8,721 China 18,967 7,889 Other foreign countries 26,574 11,042 Total cash and cash equivalents $ 406,867 $ 256,974 C ash and cash equivalents as of December 31, 2023 and December 31, 2022 were $407 million and $257 million, respectively.
Capital Resources Cash in U.S. and Foreign Jurisdictions As of December 31, (In thousands) 2024 2023 United States of America $ 178,558 $ 230,298 United Kingdom 72,138 72,342 Canada 47,336 35,736 European Union 29,084 22,950 China 26,021 18,967 Other foreign countries 31,905 26,574 Total cash and cash equivalents $ 385,042 $ 406,867 C ash and cash equivalents as of December 31, 2024 and December 31, 2023 were $385 million and $407 million, respectively.
Sales in the commercial aerospace market primarily benefited from higher demand for actuation and sensors products as well as surface treatment services on narrow-body and wide-body platforms, in addition to higher demand for avionics and flight test equipment on various domestic and international platforms. Commercial Markets Commercial sales increased $54 million, or 6%, to $941 million.
Sales in the commercial aerospace market primarily benefited from higher demand for OEM sensors and actuation products, surface treatment services on narrowbody and widebody platforms, as well as avionics equipment on various platforms. Commercial Markets Commercial sales increased $11 million, or 1%, to $951 million.
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. 39 Revenue recognized at a point-in-time for the year ended December 31, 2023 accounted for approximately 53% of total net sales.
During the years ended December 31, 2024, 2023, and 2022, there were no significant changes in estimated contract 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.
Similarly, the global environment, which is typically influenced by international trade, economic conditions, and geopolitical uncertainty, had also been greatly impacted by the pandemic in 2020 before it rebounded in 2021 and 2022.
In the global environment, which is typically influenced by international trade, economic conditions, and geopolitical uncertainty, GDP had also been greatly impacted by the pandemic in 2020, before it rebounded in 2021. In 2024, global GDP is expected to grow between 2.5% and 3.0%, according to various forecasts.
In the ground defense market, sales increased $92 million primarily due to higher demand for tactical battlefield communications equipment. Sales in the aerospace defense market increased $16 million primarily due to higher demand for embedded computing and flight test instrumentation equipment on various domestic and international programs.
In the ground defense market, s ales increased $47 million primarily due to higher demand for tactical battlefield communications equipment. Sales in the aerospace defense market increased $42 million primarily due to higher demand for embedded computing equipment on various helicopter and fighter jet programs.
U.S. economic activity has rebounded since 2021, due in part to the availability of vaccines, increased government support to rebuild the country’s infrastructure, increased U.S. consumer spending and continued low levels of unemployment, though the pace of year-over-year real gross domestic product (GDP) growth has slowed. In 2020, U.S.
Following the events of 2020, U.S. economic activity rebounded sharply in 2021, due in part to the availability of vaccines, increased government support to rebuild the country’s infrastructure, increased U.S. consumer spending and continued low levels of unemployment.
In the aerospace defense market, sales benefited from the incremental impact from our arresting systems acquisition as well as higher demand for embedded computing and flight test instrumentation equipment on various domestic and international programs. Sales in the ground defense market increased primarily due to higher demand for tactical battlefield communications equipment.
Sales in the aerospace defense market increased primarily due to higher demand for both arresting systems equipment supporting various domestic customers as well as embedded computing equipment on various helicopter and fighter jet programs. Sales in the ground defense market increased primarily due to higher demand for tactical battlefield 36 communications equipment.
As such, the potential remains for a shutdown at the expiration of the CR, or implementation of a sequester if not passed by April 30th, which would mandate a 1% cut to defense spending.
In addition, the U.S. government began its October 1 fiscal year under yet another continuing resolution (CR), which has yet to be resolved. As such, the potential remains for a shutdown at the expiration of the CR, or implementation of a sequester if not passed by April 30th, which would mandate a 1% cut to defense spending.
In early 2023, the President’s FY24 budget request was released, calling for a 3.2% increase in defense spending. Key priorities in the President’s initial request included naval shipbuilding, tactical battlefield communications, vehicle modernization, missiles, munitions, space, and cyber capabilities, many of which provide opportunities for Curtiss-Wright.
Key priorities in the initial request included naval shipbuilding, tactical battlefield communications, vehicle modernization, missiles and hypersonics, munitions and space, many of which provide opportunities for Curtiss-Wright.
Year Ended December 31, Percent Change (In thousands, except percentages) 2023 2022 2023 vs. 2022 Sales $ 815,912 $ 690,262 18 % Operating income 191,775 154,568 24 % Operating margin 23.5 % 22.4 % 110 bps New orders $ 936,329 $ 836,660 12 % Backlog $ 886,317 $ 786,026 13 % Components of sales and operating income growth (decrease): 2023 vs. 2022 Sales Operating Income Organic 18 % 21 % Acquisitions — % — % Foreign currency — % 3 % Total 18 % 24 % Sales increased $126 million, or 18%, to $816 million, from the comparable prior year period.
Year Ended December 31, Percent Change (In thousands, except percentages) 2024 2023 2024 vs. 2023 Sales $ 910,706 $ 815,912 12 % Operating income 224,739 191,775 17 % Operating margin 24.7 % 23.5 % 120 bps New orders $ 1,056,388 $ 936,329 13 % Backlog $ 986,899 $ 886,317 11 % Components of sales and operating income growth (decrease): 2024 vs. 2023 Sales Operating Income Organic 12 % 18 % Restructuring — % (1) % Foreign currency — % — % Total 12 % 17 % Sales increased $95 million, or 12%, to $911 million, from the comparable prior year period.
Year Ended December 31, Percent Change (In thousands, except percentages) 2023 2022 2023 vs. 2022 Sales $ 887,228 $ 836,035 6 % Operating income 145,278 136,996 6 % Operating margin 16.4 % 16.4 % — bps New orders $ 895,332 $ 883,838 1 % Backlog $ 387,248 $ 371,305 4 % 33 Components of sales and operating income growth (decrease): 2023 vs. 2022 Sales Operating Income Organic 6 % 6 % Acquisitions — % — % Foreign currency — % — % Total 6 % 6 % Sales increased $51 million, or 6%, to $887 million, from the comparable prior year period primarily due to higher sales in the commercial aerospace and general industrial markets.
Year Ended December 31, Percent Change (In thousands, except percentages) 2024 2023 2024 vs. 2023 Sales $ 932,133 $ 887,228 5 % Operating income 148,023 145,278 2 % Operating margin 15.9 % 16.4 % (50 bps) New orders $ 982,395 $ 895,332 10 % Backlog $ 434,455 $ 387,248 12 % Components of sales and operating income growth (decrease): 2024 vs. 2023 Sales Operating Income Organic 5 % 8 % Restructuring — % (7) % Foreign currency — % 1 % Total 5 % 2 % Sales increased $45 million, or 5%, to $932 million, from the comparable prior year period primarily due to higher sales in the commercial aerospace and aerospace defense markets.
Through continued innovation as well as incremental research and development investments, Curtiss-Wright remains aligned with high growth DoD priorities, modernization efforts and emerging technological trends, including security, cyber, hypersonics, net-centric connected battlefield, soldier survivability, and MOSA capabilities. In December 2022, the DoD approved and enacted a FY’23 defense budget of $817 billion, reflecting an approximate $75 billion increase from FY’22.
Through continued innovation as well as incremental research and development investments, Curtiss-Wright remains aligned with numerous high growth DoD priorities, modernization efforts and emerging technological trends, including security, cyber, hypersonics, net-centric connected battlefield and soldier survivability.
Operating income for the year increased $61 million, or 14%, to $485 million, and operating margin increased 40 basis points compared with 2022. In the Defense Electronics segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, partially offset by higher investments in research and development.
Operating income for the year increased $44 million, or 9%, to $529 million, while operating margin decreased 10 basis points compared with 2023. In the Defense Electronics segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher A&D sales.
The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition, after which they are reported 31 as organic. The definition of “organic” excludes costs associated with the sale of our industrial valves business in Germany as well as the effects of foreign currency translation.
The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. The definition of “organic” excludes the effects of costs associated with our 2024 Restructuring Program and foreign currency translation.
Net Sales by End Market and Customer Type Year Ended December 31, Percent change (In thousands, except percentages) 2023 2022 2023 vs. 2022 Aerospace & Defense markets: Aerospace Defense $ 551,622 $ 479,743 15 % Ground Defense 308,008 219,739 40 % Naval Defense 720,013 694,015 4 % Commercial Aerospace $ 324,949 $ 276,519 18 % Total Aerospace & Defense $ 1,904,592 $ 1,670,016 14 % Commercial markets: Power & Process 509,998 472,300 8 % General Industrial 430,783 414,709 4 % Total Commercial $ 940,781 $ 887,009 6 % Total Curtiss-Wright $ 2,845,373 $ 2,557,025 11 % Aerospace & Defense Markets Sales increased $235 million, or 14%, to $1,905 million, as compared to the prior year period, primarily due to higher sales across all markets.
Net Sales by End Market and Customer Type Year Ended December 31, Percent change (In thousands, except percentages) 2024 2023 2024 vs. 2023 Aerospace & Defense markets: Aerospace Defense $ 616,590 $ 551,622 12 % Ground Defense 353,326 308,008 15 % Naval Defense 821,898 720,013 14 % Commercial Aerospace 378,086 324,949 16 % Total Aerospace & Defense $ 2,169,900 $ 1,904,592 14 % Commercial markets: Power & Process 540,788 509,998 6 % General Industrial 410,501 430,783 (5) % Total Commercial $ 951,289 $ 940,781 1 % Total Curtiss-Wright $ 3,121,189 $ 2,845,373 10 % Aerospace & Defense Markets Sales increased $265 million, or 14%, to $2,170 million, as compared to the prior year period, primarily due to higher sales across all markets.
International markets represent a growing portion of overall sales for defense prime contractors, creating additional growth opportunities for Curtiss-Wright over the planning period as North Atlantic Treaty Organization (NATO) countries throughout Europe ramp up their spending to or above 2.0% of annual GDP.
International markets represent a growing portion of overall sales for defense prime contractors, creating additional growth opportunities for Curtiss-Wright as NATO countries throughout Europe commit to ramping up their spending to 2% or more of annual GDP, with nearly 70% thus far announcing their intentions to meet those spending levels.
New orders increased $11 million as compared to the prior year, primarily due to an increase in orders for actuation and sensors products within our A&D markets as well as surface treatment services within our commercial markets. These increases were partially offset by the timing of new orders for industrial vehicles.
New orders increased $87 million as compared to the prior year, primarily due to an increase in orders for surface treatment services within our A&D markets.
Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. Contract assets primarily relate to our right 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.
Contract assets primarily relate to our right 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. Contract liabilities primarily consist of customer advances received prior to revenue being earned.
The funded status of the Curtiss-Wright Pension Plan increased by $34 million in 2023, primarily driven by favorable asset returns in 2023, partially offset by a higher benefit obligation due to a lower discount rate.
The funded status of the Curtiss-Wright Pension Plan increased by $36 million in 2024, primarily driven by a higher discount rate in 2024.
In the commercial aerospace market, sales increased $37 million primarily due to higher demand for sensors products and surface treatment services on various narrow-body and wide-body platforms. The general industrial market benefited from sales increases of $13 million primarily due to higher demand for industrial automation products as well as higher sales of surface treatment services.
In the commercial aerospace market, sales increased $43 million primarily due to higher OEM sales of sensors and actuation products, as well as surface treatment services, on narrowbody and widebody platforms. The aerospace defense market benefited from sales increases of $15 million primarily due to higher actuation development and production on various fighter jet programs.
The following table quantifies our significant future contractual obligations and commercial commitments as of December 31, 2023: 38 (In thousands) Total 2024 2025 2026 2027 2028 Thereafter Debt Principal Repayments $ 1,047,500 $ — $ 90,000 $ 200,000 $ — $ 157,500 $ 600,000 Operating Leases 172,531 35,623 29,043 24,115 18,438 15,429 49,883 Interest Payments on Fixed Rate Debt 264,463 41,448 40,235 37,441 29,503 27,251 88,585 Total $ 1,484,494 $ 77,071 $ 159,278 $ 261,556 $ 47,941 $ 200,180 $ 738,468 We enter into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to future performance on certain contracts to provide products and services and to secure advance payments we have received from certain international customers.
The following table quantifies our significant future contractual obligations and commercial commitments as of December 31, 2024: (In thousands) Total 2025 2026 2027 2028 2029 Thereafter Debt Principal Repayments $ 1,047,500 $ 90,000 $ 200,000 $ — $ 157,500 $ — $ 600,000 Operating Leases 211,201 36,768 32,759 27,549 24,529 19,725 69,871 Interest Payments on Fixed Rate Debt 223,015 40,235 37,441 29,503 27,251 23,070 65,515 Total $ 1,481,716 $ 167,003 $ 270,200 $ 57,052 $ 209,280 $ 42,795 $ 735,386 We enter into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to future performance on certain contracts to provide products and services and to secure advance payments we have received from certain international customers.
Year Ended December 31, Percent Change (In thousands, except percentages) 2023 2022 2023 vs. 2022 Sales $ 1,142,233 $ 1,030,728 11 % Operating income 189,227 177,582 7 % Operating margin 16.6 % 17.2 % (60 bps) New orders $ 1,258,368 $ 1,222,052 3 % Backlog $ 1,599,678 $ 1,465,400 9 % Components of sales and operating income growth (decrease): 2023 vs. 2022 Sales Operating Income Organic 7 % 5 % Acquisitions 4 % — % Divestiture-related costs — % 2 % Foreign currency — % — % Total 11 % 7 % Sales increased $111 million, or 11%, to $1,142 million, from the comparable prior year period, primarily due to higher sales across our aerospace defense, naval defense, and power & process markets.
Year Ended December 31, Percent Change (In thousands, except percentages) 2024 2023 2024 vs. 2023 Sales $ 1,278,350 $ 1,142,233 12 % Operating income 199,663 189,227 6 % Operating margin 15.6 % 16.6 % (100 bps) New orders $ 1,657,659 $ 1,258,368 32 % Backlog $ 2,025,939 $ 1,599,678 27 % 35 Components of sales and operating income growth (decrease): 2024 vs. 2023 Sales Operating Income Organic 11 % 5 % Acquisitions 1 % — % Foreign currency — % 1 % Total 12 % 6 % Sales increased $136 million, or 12%, to $1,278 million, from the comparable prior year period.
Operating income in the Naval & Power segment benefited from 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. These increases were partially offset by 32 unfavorable product mix, unfavorable naval contract adjustments, and higher intangible amortization related to our arresting systems acquisition.
Operating income in the Naval & Power segment increased while operating margin decreased, as favorable overhead absorption on higher sales as well as the absence of first year purchase accounting costs from our arresting systems acquisition were partially offset by an unfavorable naval contract adjustment and unfavorable product mix.
We provide equipment and services to both the aftermarket and new build markets, and have content on every reactor operating in the U.S. today. Additionally, we are executing initiatives to leverage our capabilities into the broader conventional power generation market, including next-generation advanced Small Modular Reactor (SMR) designs.
We provide equipment and services to both the aftermarket and new build markets, and have content on every reactor operating in the U.S. today.
The effective tax rate of 23.4% for the year ended December 31, 2023, decreased as compared to an effective tax rate of 24.4% in the prior year period, primarily due to a favorable change in the valuation allowance on foreign branch tax credit versus an unfavorable change in the prior year.
The effective tax rate of 22.4% for the year ended December 31, 2023, decreased as compared to an effective tax rate of 23.4% in the prior year period, primarily due to the benefits of a legal entity restructuring as well as lower provisional tax expense associated with foreign withholding taxes.
SUPPLEMENTARY INFORMATION 35 The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our consolidated operating results.
New orders increased $399 million as compared to the prior year, primarily due to an increase in naval defense orders supporting aircraft carrier and submarine programs. 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.
In the long term, the global drive towards electrification and electronification, push for zero or low-emissions vehicles, investments in green technology, advancements in robotics and automation, and new government regulations will provide steady growth opportunities for Curtiss-Wright’s technologies serving this market.
Sales are primarily driven by global demand from general industrial customers. 31 In the long term, the global drive towards electrification and electronification, new government regulations for emissions (expected to go into effect in 2027), investment in green technology, and advancements in robotics and automation, along with consistent new product introductions will provide steady growth opportunities for Curtiss-Wright’s technologies serving this market.
Sales increases in the naval defense market were primarily due to higher sales on the Columbia-class and Virginia-class submarine programs, partially offset by lower sales on various aircraft carrier programs.
Sales increases in the naval defense market were primarily due to higher demand and timing of sales on various submarine programs as well as higher foreign military sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−1 removed5 unchanged
Biggest changeWe do not use such instruments for trading or other speculative purposes. Information regarding our accounting policy on financial instruments is contained in Note 1 to the Consolidated Financial Statements. Interest Rates The market risk for a change in interest rates relates primarily to our debt obligations.
Biggest changeWe do not use such instruments for trading or other speculative purposes. Interest Rates The market risk for a change in interest rates relates primarily to our debt obligations. Our fixed rate interest exposure was 100% as of December 31, 2024 and December 31, 2023.
If foreign exchange rates were to collectively weaken or strengthen against the U.S. dollar by 10%, net earnings would have decreased or increased, respectively, by approximately $13 million as it relates exclusively to foreign currency exchange rate exposures. Financial instruments expose us to counterparty credit risk for non-performance and to market risk for changes in interest and foreign currency rates.
If foreign exchange rates were to collectively weaken or strengthen against the U.S. dollar by 10%, net earnings would have decreased or increased, respectively, by approximately $18 million as it relates exclusively to foreign currency exchange rate exposures. Financial instruments expose us to counterparty credit risk for non-performance and to market risk for changes in interest and foreign currency rates.
Our fixed rate interest exposure was 100% as of December 31, 2023 and December 31, 2022. As of December 31, 2023, a change in interest rates of 1% would not have a material impact on consolidated interest expense. Information regarding our Senior Notes and Revolving Credit Agreement is contained in Note 14 to the Consolidated Financial Statements.
As of December 31, 2024, a change in interest rates of 1% would not have a material impact on consolidated interest expense. Information regarding our Senior Notes and Revolving Credit Agreement is contained in Note 13 to the Consolidated Financial Statements.
We seek to minimize any material risks from foreign currency exchange rate fluctuations through our normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments.
We seek to minimize any material risks from foreign currency exchange rate fluctuations through our normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. We used forward foreign currency contracts to manage our currency rate exposures during the year ended December 31, 2024.
Removed
We used forward foreign currency contracts to manage our currency rate exposures during the year ended December 31, 2023, and, in order to manage our interest rate risk, we may, from time to time, enter into interest rate swaps to balance the ratio of fixed to floating rate debt.

Other CW 10-K year-over-year comparisons