CURTISS WRIGHT CORP

Previous wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three months ended March 31, 2026. The financial information as of March 31, 2026 should be read in conjunction with the financial statements for the year ended December 31, 2025 contained in our Form 10-K filed with the SEC.

Current wording

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three and six month periods ended June 30, 2026. The financial information as of June 30, 2026 should be read in conjunction with the financial statements for the year ended December 31, 2025 contained in our Form 10-K.

Previous wording

Sales during the three months ended March 31, 2026 increased $108 million, or 13%, to $914 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $28 million, $11 million, and $69 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Current wording

Sales during the six months ended June 30, 2026 increased $155 million, or 9%, to $1,838 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $56 million, $4 million, and $95 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Previous wording

Operating income during the three months ended March 31, 2026 increased $30 million, or 23%, to $160 million, compared with the prior year period, and operating margin increased 150 basis points to 17.5% compared with the same period in 2025. Increases in operating income and operating margin were primarily due to favorable absorption on higher sales across all segments. Operating income and operating margin in the Defense Electronics and Naval & Power segments also benefited from favorable product mix.

Current wording

Operating income during the six months ended June 30, 2026 increased $53 million, or 18%, to $338 million, and operating margin increased 140 basis points to 18.4%, compared with the same period in 2025, due to increases across all segments. In the Aerospace & Industrial segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, favorable product mix, as well as the benefits of the Company's restructuring initiatives. Operating income and operating margin in the Defense Electronics segment increased primarily due to favorable product mix and the benefits from our cost containment initiatives. In the Naval & Power segment, increases in operating income and operating margin were primarily due tofavorable overhead absorption on higher sales.

Previous wording

Non-segment operating expenseof $11 million during the three months ended March 31, 2026 was essentially flat against the comparable prior year period.

Current wording

Non-segment operating expense in the second quarter decreased $1 million, or 8%, to $10 million, primarily due to lower corporate costs. Non-segment operating expense of $21 million during the six months ended June 30, 2026 was essentially flat against the comparable prior year period.

Previous wording

The effective tax rate for the three months ended March 31, 2026 of 18.7% decreased compared to an effective tax rate of 19.0% in the comparable prior year period, primarily due to increased tax benefits associated with stock-based compensation.

Current wording

The effective tax rate of 22.2% in the second quarter decreased compared to an effective tax rate of 22.8% in the prior year period, primarily due to lower withholding taxes on foreign undistributed earnings. The effective tax rate of 20.7% for the six months ended June 30, 2026 decreased as compared to an effective tax rate of 21.1% in the prior year period, primarily due to increased tax benefits associated with stock-based compensation.

Previous wording

Comprehensive income for the three months ended March 31, 2026 was $108 million, compared to comprehensive income of $120 million in the prior year period. The change was primarily due to the following:

Current wording

Comprehensive income during the six months ended June 30, 2026 was $263 million, compared to comprehensive income of $298 million in the prior year period. The change was primarily due to the following:

Previous wording

•Foreign currency translation adjustments for the three months ended March 31, 2026 resulted in a $21 million comprehensive loss, compared to a $19 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound and Canadian dollar.

Current wording

•Foreign currency translation adjustments for the six months ended June 30, 2026 resulted in a $17 million comprehensive loss, compared to a $76 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the British Pound and Canadian dollar.

Previous wording

New orders during the three months ended March 31, 2026 increased $167 million, or 16%, from the prior year period to $1.2 billion, primarily due to an increase in orders for naval defense and commercial nuclear products in the Naval & Power segment. New orders also benefited from the timing of orders on naval and ground defense equipment in the Defense Electronics segment as well as an increase in orders for actuation products on aerospace defense equipment in the Aerospace & Industrial segment. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

Current wording

New orders during the six months ended June 30, 2026 increased $243 million from the comparable prior year period, primarily due to strong demand for ground and naval defense orders in the Defense Electronics segment. New orders also benefited from increased demand for actuation products on aerospace defense and ground defense equipment and industrial vehicle products within our commercial markets in the Aerospace & Industrial segment. These increases were partially offset by the timing of naval defense orders in the Naval & Power segment. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.

Previous wording

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

Current wording

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

Previous wording

Sales during the three months ended March 31, 2026 increased $28 million, or 12%, to $255 million from the prior year period. In the commercial aerospace market, sales increased $13 million primarily due to higher OEM sales of actuation equipment, sensors products, and surface treatment services on narrowbody and widebody platforms. Sales in the aerospace defense market benefited from higher demand for sensors products, with sales increases in the ground defense market primarily due to higher sales of electromechanical actuation equipment. Sales in the general industrial market benefited primarily from higher sales of industrial vehicle products to off-highway vehicle platforms.

Current wording

Sales during the six months ended June 30, 2026 increased$56 million, or 12%, to $523 million from the prior year period. In the commercial aerospace market, sales increased $25 million primarily due to higher OEM sales of actuation equipment, sensors products, and surface treatment services on narrowbody and widebody platforms. Sales in the aerospace defense market benefited $10 million from higher demand for sensors products and actuation equipment supporting various international fighter jet programs. In both the ground and naval defense markets, sales increased primarily due to higher demand for electromechanical actuation equipment. Sales in the general industrial market benefited $10 million primarily from higher sales of industrial vehicle products to off-highway vehicle platforms.

Previous wording

Operating income during the three months ended March 31, 2026 increased $9 million, or 29%, to $38 million from the prior year period, and operating margin increased 190 basis points to 15.1%, primarily due to favorable overhead absorption on higher sales.

Current wording

Operating income during the six months ended June 30, 2026 increased $19 million, or 27%, to $88 million from the prior year period, and operating margin increased 190 basis points to 16.7%, primarily due to favorable overhead absorption on higher sales, favorable product mix, as well as the benefits of the Company's restructuring initiatives. These increases were partially offset by unfavorable foreign currency translation and higher investment in research and development.

Previous wording

New orders during the three months ended March 31, 2026 increased $40 million, or 16%, from the prior year period to $291 million, primarily due an increase in orders for actuation products on aerospace defense equipment as well as an increase in orders for industrial vehicle products within our commercial markets.

Current wording

New orders during the six months ended June 30, 2026 increased $100 million primarily due to an increase in orders for actuation products on aerospace defense and ground defense equipment, as well as an increase in orders for industrial vehicle products within our commercial markets.

Previous wording

Sales during the three months ended March 31, 2026 increased$11 million, or 5%, to $256 million from the prior year period. Sales in the aerospace defense market benefited $13 million primarily due to higher demand for embedded computing and avionics equipment, partially offset by the timing of sales on various helicopter programs. Sales increases in the commercial aerospace market were primarily due to higher sales of aerospace instrumentation equipment to OEM customers. These increases were partially offset by lower sales in the naval defense market primarily due to the timing of embedded computing equipment sales supporting various domestic and international programs.

Current wording

Sales during the six months ended June 30, 2026 increased $4 million, or 1%, to $502 million from the prior year period. Sales in the aerospace defense market benefited $17 million primarily due to higher demand for embedded computing and avionics equipmenton various domestic fighter jet and UAV programs, partially offset by the timing of sales on various helicopter programs. In the ground defense market, sales decreased $11 million primarily due to thetiming of tactical communications equipment sales. Lower sales in the naval defense market were primarily due to the timing of embedded computing equipment sales supporting various domestic and international programs.

Previous wording

New orders during the three months ended March 31, 2026 increased $42 million, or 18%, from the prior year period to $278 million, primarily due to the timing of orders on naval and ground defense equipment.

Current wording

New orders during the six months ended June 30, 2026 increased $151 million primarily due to the timing of orders on ground and naval defense equipment.

Previous wording

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.

Current wording

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

Previous wording

Sales during the three months ended March 31, 2026 increased $69 million, or 21%, to $402 million from the prior year period. In the naval defense market, sales increased $35 million primarily due to the timing of production on the Virginia-class and Columbia-class submarine programs, as well as higher sales of aftermarket fleet services. Sales in the power & process market increased $25 million primarily due to higher sales of commercial nuclear products supporting the maintenance of existing operating reactors and transition from development to the initial prototype stage on next-generation advanced reactors. In the aerospace defense market, sales increased $10 million primarily due to higher sales of arresting systems equipment supporting various international customers.

Current wording

Sales during the six months ended June 30, 2026 increased $95 million, or 13%, to $813 million from the prior year period. In the naval defense market, sales increased $51 million primarily due to the timing of production on the Virginia-class submarine program as well as higher aftermarket sales supporting naval shipyards. Sales in the power & process market increased $35 million primarily due to higher commercial nuclear aftermarket sales supporting the maintenance of existing operating reactors, higher sales supporting next-generation advanced reactors, as well as higher government nuclear sales. In the aerospace defense market, sales increased $10 million primarily due to higher sales of arresting systems equipment supporting various international customers.

Previous wording

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

Current wording

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.

Previous wording

Sales during the three months ended March 31, 2026 increased $30 million, or 12%, to $272 million. In the power & process market, sales increased primarily due to higher sales of commercial nuclear products supporting the maintenance of existing operating reactors and transition from development to the initial prototype stage on next-generation advanced reactors. Sales in the general industrial market benefited primarily from higher sales of industrial vehicle products to off-highway vehicle platforms.

Current wording

Sales during the six months ended June 30, 2026 increased $42 million, or 8%, to $553 million. Sales in the power & process market increased primarily due tohigher commercial nuclear aftermarket sales supporting the maintenance of existing operating reactors, higher sales supporting next-generation advanced reactors, as well as higher government nuclear sales. Sales in the general industrial market benefited primarily from higher sales of industrial vehicle products to off-highway vehicle platforms.

Previous wording

Net cash used in operating activities decreased $33 million from the prior year period, primarily due to higher cash earnings and improved working capital in the current period.

Current wording

Net cash provided by operating activities increased $78 million from the prior year period, primarily due to higher cash earnings and improved working capital in the current period.

Previous wording

Net cash used in financing activities decreased $91 million from the prior year period, primarily due to the repayment of our 3.85% Senior Notes in February 2025. Refer to the "Financing Activities" section below for further details.

Current wording

Net cash used for financing activities decreased $96 million from the prior year period, primarily due to the repayment of our 3.85% Senior Notes in February 2025. Refer to the "Financing Activities" section below for further details.

Previous wording

The Corporation’s debt outstanding had an average interest rate of 3.8% for both the three months ended March 31, 2026 and 2025. The Corporation’s average debt outstanding was $965 million and $1,021 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

The Corporation’s debt outstanding had an average interest rate of 3.8% for boththe three and six months ended June 30, 2026, respectively, and 3.8% for both the three and six months ended June 30, 2025, respectively. The Corporation’s average debt outstanding was$958 million and$961 million for the three and six months ended June 30, 2026, respectively, and $960 million and $990 million for the three and six months ended June 30, 2025, respectively.

Previous wording

As of March 31, 2026, the Corporation had approximately $29 million in letters of credit supported by the credit facility. The unused credit available under the credit facility as of March 31, 2026 was $721 million, which could be borrowed without violating any of our debt covenants.

Current wording

As of June 30, 2026, the Corporation had approximately $27 million in letters of credit supported by the credit facility. The unused credit available under the credit facility as of June 30, 2026 was $973 million, which could be borrowed without violating any of our debt covenants.

Previous wording

For the three months ended March 31, 2026, the Corporation repurchased approximately 22,000 shares of its common stock for $14 million. For the three months ended March 31, 2025, the Corporation repurchased approximately 42,000 shares of its common stock for $14 million.

Current wording

For the six months ended June 30, 2026, the Corporation repurchased approximately 42,000 shares of its common stock for $29 million. For the six months ended June 30, 2025, the Corporation repurchased approximately 102,000 shares of its common stock for $35 million.

Previous wording

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

Current wording

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

Previous wording

As of March 31, 2026, we had the ability to borrow additional debt of approximately $2.9 billion without violating our debt to capitalization covenant.

Current wording

As of June 30, 2026, we had the ability to borrow additional debt of $3.1 billion without violating our debt to capitalization covenant.