cw-20200630
CURTISS WRIGHT 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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020

or

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

Commission File Number 1-134

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

Delaware13-0612970
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)

 130 Harbour Place Drive, Suite 300
Davidson,North Carolina28036
(Address of principal executive offices)(Zip Code)

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

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

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

Yes                          No  

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

Yes                          No  

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



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

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

Yes     No  

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

Common Stock, par value $1.00 per share: 41,576,986 shares (as of July 31, 2020).



CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

TABLE of CONTENTS


PART I – FINANCIAL INFORMATIONPAGE
Item 1.
Item 2.
Item 3.
Item 4.
PART II – OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



Page 3


PART 1- FINANCIAL INFORMATION
Item 1. Financial Statements

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands, except per share data)2020201920202019
Net sales
Product sales$466,445  $532,253  $964,374  $1,003,852  
Service sales83,602  106,743  186,904  213,458  
Total net sales550,047  638,996  1,151,278  1,217,310  
Cost of sales
Cost of product sales309,152  342,726  639,965  654,682  
Cost of service sales54,869  66,226  124,708  135,711  
Total cost of sales364,021  408,952  764,673  790,393  
Gross profit186,026  230,044  386,605  426,917  
Research and development expenses18,269  18,900  36,576  36,141  
Selling expenses25,193  30,693  56,781  62,170  
General and administrative expenses76,606  74,766  153,264  150,876  
Restructuring expenses10,609    12,189    
Operating income55,349  105,685  127,795  177,730  
Interest expense8,515  7,960  16,004  15,232  
Other income (expense), net(4,105) 5,871  1,427  11,349  
Earnings before income taxes42,729  103,596  113,218  173,847  
Provision for income taxes(11,711) (23,524) (30,439) (38,182) 
Net earnings$31,018  $80,072  $82,779  $135,665  
Net earnings per share:
Basic earnings per share$0.75  $1.87  $1.97  $3.17  
Diluted earnings per share$0.74  $1.86  $1.95  $3.15  
Dividends per share0.17  0.17  0.34  0.32  
Weighted-average shares outstanding:
Basic41,629  42,758  42,092  42,776  
Diluted41,855  43,024  42,362  43,038  
See notes to condensed consolidated financial statements

Page 4


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


Three Months EndedSix Months Ended
June 30,June 30,
2020201920202019
Net earnings$31,018  $80,072  $82,779  $135,665  
Other comprehensive income (loss)
Foreign currency translation adjustments, net of tax (1)
$24,185  $540  $(26,090) $8,782  
Pension and postretirement adjustments, net of tax (2)
4,002  1,749  8,683  3,432  
Other comprehensive income (loss), net of tax28,187  2,289  (17,407) 12,214  
Comprehensive income$59,205  $82,361  $65,372  $147,879  

(1) The tax benefit included in other comprehensive income (loss) for foreign currency translation adjustments for the three and six months ended June 30, 2020 and June 30, 2019 was immaterial.

(2) The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2020 was $1.3 million and $2.7 million, respectively. The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2019 was $0.6 million and $1.1 million, respectively.

 
See notes to condensed consolidated financial statements
Page 5


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

June 30, 2020December 31, 2019
Assets
Current assets:
Cash and cash equivalents$155,383  $391,033  
Receivables, net598,340  632,194  
Inventories, net461,902  424,835  
Other current assets51,584  81,729  
Total current assets1,267,209  1,529,791  
Property, plant, and equipment, net381,226  385,593  
Goodwill1,197,194  1,166,680  
Other intangible assets, net489,208  479,907  
Operating lease right-of-use assets, net157,526  165,490  
Prepaid pension asset123,695    
Other assets26,613  36,800  
Total assets$3,642,671  $3,764,261  
Liabilities  
Current liabilities:
Accounts payable171,842  222,000  
Accrued expenses128,800  164,744  
Income taxes payable7,177  7,670  
Deferred revenue263,110  276,115  
Other current liabilities91,049  74,202  
Total current liabilities661,978  744,731  
Long-term debt834,802  760,639  
Deferred tax liabilities, net92,941  80,159  
Accrued pension and other postretirement benefit costs90,004  138,635  
Long-term operating lease liability137,213  145,124  
Long-term portion of environmental reserves15,271  15,026  
Other liabilities97,167  105,575  
Total liabilities1,929,376  1,989,889  
Contingencies and commitments (Note 13)
Stockholders’ equity
Common stock, $1 par value,100,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 49,187,378 shares issued as of June 30, 2020 and December 31, 2019; outstanding shares were 41,565,240 as of June 30, 2020 and 42,680,215 as of December 31, 2019
49,187  49,187  
Additional paid in capital118,467  116,070  
Retained earnings2,565,727  2,497,111  
Accumulated other comprehensive loss(342,681) (325,274) 
Common treasury stock, at cost (7,622,138 shares as of June 30, 2020 and 6,507,163 shares as of December 31, 2019)
(677,405) (562,722) 
Total stockholders’ equity1,713,295  1,774,372  
Total liabilities and stockholders’ equity$3,642,671  $3,764,261  
See notes to condensed consolidated financial statements

Page 6


CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
(In thousands)20202019
Cash flows from operating activities:
Net earnings$82,779  $135,665  
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities
Depreciation and amortization56,568  51,600  
Gain on fixed asset disposals(373) (6,080) 
Deferred income taxes4,208  1,450  
Share-based compensation7,140  6,980  
Foreign exchange loss on substantial liquidation of subsidiary9,550    
Inventory write-downs9,015    
Change in operating assets and liabilities, net of businesses acquired and divested:
Receivables, net31,898  (37,621) 
Inventories, net(40,691) (11,080) 
Progress payments(470) (356) 
Accounts payable and accrued expenses(81,848) (87,430) 
Deferred revenue(12,622) 5,278  
Income taxes26,042  2,872  
Pension and postretirement benefits, net(149,514) 311  
Other current and long-term assets and liabilities6,109  (21,203) 
Net cash provided by (used for) operating activities(52,209) 40,386  
Cash flows from investing activities:
Proceeds from sales and disposals of long lived assets2,411  8,920  
Acquisition of intangible assets  (147) 
Additions to property, plant, and equipment(29,324) (33,471) 
Acquisition of businesses, net of cash acquired(82,003) (50,075) 
Net cash used for investing activities(108,916) (74,773) 
Cash flows from financing activities:
Borrowings under revolving credit facility306,797  7,318  
Payment of revolving credit facility(231,797) (7,561) 
Repurchases of common stock(124,613) (25,065) 
Proceeds from share-based compensation5,189  5,411  
Dividends paid(7,089) (6,420) 
Other(429) (395) 
Net cash used for financing activities(51,942) (26,712) 
Effect of exchange-rate changes on cash(22,583) 1,377  
Net decrease in cash and cash equivalents(235,650) (59,722) 
Cash and cash equivalents at beginning of period391,033  276,066  
Cash and cash equivalents at end of period$155,383  $216,344  
Supplemental disclosure of non-cash activities:  
Capital expenditures incurred but not yet paid$152  $85  
See notes to condensed consolidated financial statements

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

For the six months ended June 30, 2020
Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock
December 31, 2019$49,187  $116,070  $2,497,111  $(325,274) $(562,722) 
Net earnings—  —  82,779  —  —  
Other comprehensive loss, net of tax—  —  —  (17,407) —  
Dividends declared—  —  (14,163) —  —  
Restricted stock—  (4,115) —  —  4,115  
Stock options exercised—  106  —  —  5,081  
Share-based compensation—  6,923  —  —  217  
Repurchase of common stock—  —  —  —  (124,613) 
Other—  (517) —  —  517  
June 30, 2020$49,187  $118,467  $2,565,727  $(342,681) $(677,405) 

For the three months ended June 30, 2020
Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock
March 31, 2020$49,187  $114,911  $2,541,777  $(370,868) $(665,170) 
Net earnings—  —  31,018  —  —  
Other comprehensive income, net of tax—  —  —  28,187  —  
Dividends declared—  —  (7,068) —  —  
Stock options exercised—  (244) —  —  365  
Share-based compensation—  3,800  —  —    
Repurchase of common stock—  —  —  —  (12,600) 
June 30, 2020$49,187  $118,467  $2,565,727  $(342,681) $(677,405) 

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

For the six months ended June 30, 2019
Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock
December 31, 2018$49,187  $118,234  $2,191,471  $(288,447) $(539,664) 
Cumulative effect from adoption of ASU 2018-02—  —  26,257  (26,257) —  
Net earnings—  —  135,665  —  —  
Other comprehensive income, net of tax—  —  —  12,214  —  
Dividends declared—  —  (13,690) —  —  
Restricted stock—  (5,491) —  —  5,491  
Stock options exercised—  (1,822) —  —  7,233  
Share-based compensation—  6,575  —  —  405  
Repurchase of common stock—  —  —  —  (25,065) 
Other—  (661) —  —  661  
June 30, 2019$49,187  $116,835  $2,339,703  $(302,490) $(550,939) 

For the three months ended June 30, 2019
Common StockAdditional Paid in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury Stock
March 31, 2019$49,187  $114,696  $2,266,902  $(304,779) $(540,426) 
Net earnings—  —  80,072  —  —  
Other comprehensive income, net of tax—  —  —  2,289  —  
Dividends declared—  —  (7,271) —  —  
Stock options exercised—  (1,303) —  —  2,038  
Share-based compensation—  3,442  —  —  43  
Repurchase of common stock—  —  —  —  (12,594) 
June 30, 2019$49,187  $116,835  $2,339,703  $(302,490) $(550,939) 
See notes to condensed consolidated financial statements


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



1.           BASIS OF PRESENTATION

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

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

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

Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete on contracts using the over-time revenue recognition accounting method, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2020 and 2019, there were no significant changes in estimated contract costs.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2019 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

On January 1, 2020, the Corporation implemented an organizational change to align its reportable segments more closely with its current business structure. This change resulted in the transfer of two business units, one from the Commercial/Industrial segment to the Defense segment and the other from the Defense segment to the Power segment. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.

Recent accounting pronouncements adopted

ASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. On January 1, 2020, the Company adopted ASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU added a current expected credit loss impairment model to U.S. GAAP based on expected losses rather than incurred losses. As the Corporation is not subject to material trade credit risk, the adoption of this standard did not result in any impact to its allowance for doubtful accounts balance as of January 1, 2020. As a result of adoption, the Corporation will utilize current and historical collection data as well as assess current economic conditions in order to determine expected trade credit losses on a prospective basis.

2.           REVENUE

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

Performance Obligations

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

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

The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Revenue recognized on an over-time basis for the three and six months ended June 30, 2020 accounted for approximately 54% and 53%, respectively, of total net sales. Revenue recognized on an over-time basis for both the three and six months ended June 30, 2019 accounted for approximately 48% of total net sales. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Revenue recognized at a point-in-time for the three and six months ended June 30, 2020 accounted for approximately 46% and 47%, respectively, of total net sales. Revenue recognized at a point-in-time for both the three and six months ended June 30, 2019 accounted for approximately 52% of total net sales. Revenue for these types of arrangements is recognized at the point in time in which control is transferred to the customer, typically based upon the terms of delivery.

Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $2.2 billion as of June 30, 2020, of which the Corporation expects to recognize approximately 89% as net sales over the next 12-36 months. The remainder will be recognized thereafter.

Disaggregation of Revenue

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

Total Net Sales by End Market and Customer TypeThree Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Defense
Aerospace$109,305  $104,426  $211,133  $183,213  
Ground20,029  26,394  42,686  47,151  
Naval164,941  149,853  330,633  280,941  
Total Defense Customers$294,275  $280,673  $584,452  $511,305  
Commercial
Aerospace$71,084  $108,000  $171,765  $211,222  
Power Generation76,202  93,171  160,550  189,652  
General Industrial108,486  157,152  234,511  305,131  
Total Commercial Customers$255,772  $358,323  $566,826  $706,005  
Total$550,047  $638,996  $1,151,278  $1,217,310  

Contract Balances

Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the three and six months ended June 30, 2020 included in the contract liabilities balance as
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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

of January 1, 2020 was approximately $71 million and $160 million, respectively. Revenue recognized during the three and six months ended June 30, 2019 included in the contract liabilities balance as of January 1, 2019 was approximately $54 million and $133 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.

3.           ACQUISITIONS

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

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

During the six months ended June 30, 2020, the Corporation acquired two businesses for an aggregate purchase price of $90 million, which are described in more detail below. During the six months ended June 30, 2019, the Corporation acquired one business for an aggregate purchase price of $50 million, which is described in more detail below.

The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2020 includes $7 million of total net sales and $1 million of net losses from the Corporation's 2020 acquisitions. The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2019 includes $4 million of total net sales and $1 million of net losses from the Corporation's 2019 acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the six months ended June 30, 2020 and 2019.

(In thousands)20202019
Accounts receivable$3,204  $2,300  
Inventory10,233  322  
Property, plant, and equipment1,332  648  
Other current and non-current assets188  479  
Intangible assets39,384  26,000  
Operating lease right-of-use assets, net1,992  1,393  
Current and non-current liabilities(10,590) (3,252) 
Net tangible and intangible assets45,743  27,890  
Goodwill43,862  22,185  
Total purchase price$89,605  $50,075  
Cash paid to date, net of cash acquired$82,003  $50,075  
Due to seller7,602  —  
Total purchase price$89,605  $50,075  
Goodwill deductible for tax purposes$38,469  $22,185  

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

2020 Acquisitions

Integrated Air Defense System (IADS)

On April 20, 2020, the Corporation acquired the IADS product line for approximately $29 million. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type. IADS is a real-time display and post-test analysis product for flight tests. The acquired product line operates within the Defense segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

Dyna-Flo Control Valve Services Ltd. (Dyna-Flo)

On February 26, 2020, the Corporation acquired 100% of the issued and outstanding share capital of Dyna-Flo for approximately $60 million, net of cash acquired. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type, including a portion of the purchase price held back as security for potential indemnification claims against the seller. Dyna-Flo specializes in control valves, actuators, and control systems for the chemical, petrochemical, and oil and gas markets. The acquired business operates within the Commercial/Industrial segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

2019 Acquisition

Tactical Communications Group (TCG)

On March 15, 2019, the Corporation acquired 100% of the membership interests of TCG for $50 million, net of cash acquired. The Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited in escrow as security for potential indemnification claims against the seller. TCG is a designer and manufacturer of tactical data link software solutions for critical military communications systems. The acquired business operates within the Defense segment.


4.           RECEIVABLES

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

The composition of receivables is as follows:
(In thousands)June 30, 2020December 31, 2019
Billed receivables:
Trade and other receivables$361,749  $418,968  
Less: Allowance for doubtful accounts
(11,066) (8,733) 
Net billed receivables350,683  410,235  
Unbilled receivables (contract assets):
Recoverable costs and estimated earnings not billed257,185  231,067  
Less: Progress payments applied
(9,528) (9,108) 
Net unbilled receivables247,657  221,959  
Receivables, net$598,340  $632,194  

5.           INVENTORIES

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

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

The composition of inventories is as follows:
(In thousands)June 30, 2020December 31, 2019
Raw materials$177,200  $153,876  
Work-in-process107,566  100,359  
Finished goods124,698  108,329  
Inventoried costs related to U.S. Government and other long-term contracts (1)
59,773  70,414  
Inventories, net of reserves469,237  432,978  
Less:  Progress payments applied(7,335) (8,143) 
Inventories, net$461,902  $424,835  

(1) As of June 30, 2020 and December 31, 2019, this caption also includes capitalized contract development costs of $32.4 million and $39.1 million, respectively, related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of June 30, 2020 and December 31, 2019, capitalized development costs of $16.5 million and $23.7 million, respectively, are not currently supported by existing firm orders.

6.           GOODWILL

The changes in the carrying amount of goodwill for the six months ended June 30, 2020 are as follows:
(In thousands)Commercial/IndustrialDefensePowerConsolidated
December 31, 2019$431,082  $526,955  $208,643  $1,166,680  
Acquisitions29,233  14,629  —  43,862  
Adjustments—  (1,386) —  (1,386) 
Foreign currency translation adjustment(5,334) (5,942) (686) (11,962) 
June 30, 2020$454,981  $534,256  $207,957  $1,197,194  

7.           OTHER INTANGIBLE ASSETS, NET
 
The following tables present the cumulative composition of the Corporation’s intangible assets:
June 30, 2020December 31, 2019
(In thousands)GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Technology$262,861  $(145,060) $117,801  $257,676  $(140,390) $117,286  
Customer related intangibles459,417  (229,179) 230,238  434,492  (215,855) 218,637  
Programs (1)
144,000  (16,200) 127,800  144,000  (12,600) 131,400  
Other intangible assets45,902  (32,533) 13,369  43,729  (31,145) 12,584  
Total$912,180  $(422,972) $489,208  $879,897  $(399,990) $479,907  
(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. 

During the six months ended June 30, 2020, the Corporation acquired intangible assets of $39.4 million. The Corporation acquired Customer-related intangibles of $28.9 million, Technology of $8.1 million, and Other intangible assets of $2.4 million, which have weighted average amortization periods of 19.4 years, 15.0 years, and 7.5 years, respectively.

Total intangible amortization expense for the six months ended June 30, 2020 was $28.7 million, as compared to $22.6 million in the comparable prior year period.  The estimated amortization expense for the five years ending December 31, 2020 through 2024 is $58 million, $48 million, $45 million, $41 million, and $38 million, respectively.


8.           FAIR VALUE OF FINANCIAL INSTRUMENTS
 
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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

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

Effects on Condensed Consolidated Balance Sheets

As of June 30, 2020 and December 31, 2019, the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings
 
Undesignated hedges

For the three and six months ended June 30, 2020 and 2019, the gains or (losses) recognized in income on forward exchange derivative contracts not designated for hedge accounting were as follows:

Three Months EndedSix Months Ended
(In thousands)June 30,June 30,
Derivatives not designated as hedging instrument2020201920202019
Forward exchange contracts:
General and administrative expenses$700  $(2,158) $(7,432) $1,431  

Debt

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of June 30, 2020.  Accordingly, all of the Corporation’s debt is valued as a Level 2 financial instrument.  The fair values described below may not be indicative of net realizable value or reflective of future fair values.  Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.

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

June 30, 2020December 31, 2019
(In thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Revolving credit agreement, due 2024$75,000  $75,000  $—  $—  
3.84% Senior notes due 2021
100,000  102,137  100,000  102,079  
3.70% Senior notes due 2023
202,500  209,416  202,500  207,882  
3.85% Senior notes due 2025
90,000  95,028  90,000  93,838  
4.24% Senior notes due 2026
200,000  217,026  200,000  213,126  
4.05% Senior notes due 2028
67,500  72,655  67,500  71,260  
4.11% Senior notes due 2028
90,000  97,159  90,000  95,607  
Total debt825,000  868,421  750,000  783,792  
Debt issuance costs, net(534) (534) (594) (594) 
Unamortized interest rate swap proceeds10,336  10,336  11,233  11,233  
Total debt, net$834,802  $878,223  $760,639  $794,431  

9.           PENSION PLANS

Defined Benefit Pension Plans

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s 2019 Annual Report on Form 10-K.  

The components of net periodic pension cost for the three and six months ended June 30, 2020 and 2019 were as follows:

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Service cost$6,611  $5,825  $13,222  $11,651  
Interest cost6,058  7,371  12,116  14,743  
Expected return on plan assets(16,896) (14,882) (33,792) (29,766) 
Amortization of prior service cost(71) (70) (142) (141) 
Amortization of unrecognized actuarial loss5,750  2,592  11,499  5,184  
Net periodic pension cost$1,452  $836  $2,903  $1,671  

During the six months ended June 30, 2020, the Corporation made a $150 million voluntary contribution to the Curtiss-Wright Pension Plan. The Corporation does not expect to make any further contributions to the Curtiss-Wright Pension Plan in 2020. Contributions to the foreign benefit plans are not expected to be material in 2020.

Defined Contribution Retirement Plan

Effective January 1, 2014, all non-union employees who were not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation’s sponsored 401(k) plan. The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three and six months ended June 30, 2020, the expense relating to the plan was $4.3 million and $10.3 million, respectively. During the three and six months ended June 30, 2019, the expense relating to the plan was $4.2 million and $9.6 million, respectively. The Corporation made $14.0 million in contributions to the plan during the six months ended June 30, 2020, and expects to make total contributions of $18.3 million in 2020.

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

10.           EARNINGS PER SHARE
 
Diluted earnings per share was computed based on the weighted-average number of shares outstanding plus all potentially dilutive common shares.  A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
 
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Basic weighted-average shares outstanding41,629  42,758  42,092  42,776  
Dilutive effect of stock options and deferred stock compensation226  266  270  262  
Diluted weighted-average shares outstanding41,855  43,024  42,362  43,038  

For the three and six months ended June 30, 2020 and 2019, there were no anti-dilutive equity-based awards.

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

The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.
Net sales and operating income by reportable segment were as follows:
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Net sales
Commercial/Industrial$213,814  $293,149  $478,314  $563,309  
Defense170,025  158,629  336,176  292,538  
Power166,684  188,419  337,688  363,454  
Less: Intersegment revenues(476) (1,201) (900) (1,991) 
Total consolidated$550,047  $638,996  $1,151,278  $1,217,310  
Operating income (expense)
Commercial/Industrial$14,366  $51,376  $49,353  $86,581  
Defense27,872  32,607  56,576  53,339  
Power21,259  31,983  41,881  57,364  
Corporate and eliminations (1)
(8,148) (10,281) (20,015) (19,554) 
Total consolidated$55,349  $105,685  $127,795  $177,730  

(1) Corporate and eliminations includes service costs related to pension and other postretirement benefits, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.

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

Page 17

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

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Total operating income$55,349  $105,685  $127,795  $177,730  
Interest expense8,515  7,960  16,004  15,232  
Other income (expense), net(4,105) 5,871  1,427  11,349  
Earnings before income taxes$42,729  $103,596  $113,218  $173,847  

(In thousands)June 30, 2020December 31, 2019
Identifiable assets
Commercial/Industrial$1,385,177  $1,363,592  
Defense1,198,054  1,209,706  
Power885,353  885,727  
Corporate and Other174,087  305,236  
Total consolidated$3,642,671  $3,764,261  

12.           ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:
 
(In thousands)Foreign currency translation adjustments, netTotal pension and postretirement adjustments, netAccumulated other comprehensive income (loss)
December 31, 2018$(147,148) $(141,299) $(288,447) 
Other comprehensive income (loss) before reclassifications
18,447  (35,212) (16,765) 
Amounts reclassified from accumulated other comprehensive loss
  6,195  6,195  
Net current period other comprehensive loss18,447  (29,017) (10,570) 
Cumulative effect from adoption of ASU 2018-02
$(1,318) $(24,939) $(26,257) 
December 31, 2019$(130,019) $(195,255) $(325,274) 
Other comprehensive income (loss) before reclassifications
(26,090) 316  (25,774) 
Amounts reclassified from accumulated other comprehensive income (loss)
  8,367  8,367  
Net current period other comprehensive income (loss)(26,090) 8,683  (17,407) 
June 30, 2020$(156,109) $(186,572) $(342,681) 

Details of amounts reclassified from accumulated other comprehensive income (loss) are below:
 
(In thousands)Amount reclassified from AOCIAffected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
Amortization of prior service costs$470  Other income (expense), net
Amortization of actuarial losses(11,497) Other income (expense), net
(11,027) Earnings before income taxes
2,660  Provision for income taxes
Total reclassifications$(8,367) Net earnings

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

13.           CONTINGENCIES AND COMMITMENTS

Legal Proceedings

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

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. As of June 30, 2020 and December 31, 2019, there were $21.8 million and $32.6 million of stand-by letters of credit outstanding, respectively, and $6.4 million and $10.8 million of bank guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.  The Corporation has provided this financial assurance in the form of a $45.6 million surety bond.

AP1000 Program

The Electro-Mechanical Division, which is within the Corporation’s Power segment, is the reactor coolant pump (RCP) supplier for the Westinghouse AP1000 nuclear power plants under construction in China and the United States.  The terms of the AP1000 China and United States contracts include liquidated damage penalty provisions for failure to meet contractual delivery dates if the Corporation caused the delay and the delay was not excusable. On October 10, 2013, the Corporation received a letter from Westinghouse stating entitlements to the maximum amount of liquidated damages allowable under the AP1000 China contract from Westinghouse of approximately $25 million. The Corporation would be liable for liquidated damages under the contract if certain contractual delivery dates were not met and if the Corporation was deemed responsible for the delay. As of June 30, 2020, the Corporation has not met certain contractual delivery dates under its AP 1000 China and U.S. contracts; however there are significant uncertainties as to which parties are responsible for the delays. The Corporation believes it has adequate legal defenses and intends to vigorously defend this matter. Given the uncertainties surrounding the responsibility for the delays, no accrual has been made for this matter as of June 30, 2020.  As of June 30, 2020, the range of possible loss is $0 to $31 million for the AP1000 U.S. contract, for a total range of possible loss of $0 to $55.5 million.


14. RESTRUCTURING COSTS

During the three and six months ended June 30, 2020, the Corporation executed restructuring activities across all of its segments to support its ongoing effort of improving capacity utilization and operating efficiency. These restructuring activities, which include workforce reductions and consolidation of facilities, resulted in $15 million and $17 million of pre-tax charges for the three and six months ended June 30, 2020. Included in the aforementioned amounts for the three and six months ended June 30, 2020 were approximately $6 million and $7 million of non-cash charges, respectively, related to inventory write-downs and impairments of property, plant, and equipment and operating lease right-of-use assets. Inventory write-downs and asset impairments are reported in "Cost of product sales" and "Restructuring expenses," respectively, within the Condensed Consolidated Statement of Earnings. Pre-tax restructuring charges for the year ending December 31, 2020 are expected to be $35 million. The Company anticipates that these actions, which are expected to be substantially completed by the end of 2020, will result in total cost savings of approximately $40 million annually.

The following tables summarize the respective accrual balances related to these restructuring activities:

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

In thousandsRestructuring Accrual as of December 31, 2019ProvisionCash PaymentsRestructuring Accrual as of June 30, 2020
Commercial/Industrial
Severance$  $4,319  $(1,083) $3,236  
Facility closure and other exit costs  1,102  (1,102)   
Total Commercial/Industrial$  $5,421  $(2,185) $3,236  
Defense
Severance$  $2,431  $(1,896) $535  
Facility closure and other exit costs  40  (40)   
Total Defense$  $2,471  $(1,936) $535  
Power
Severance$  $2,553  $(464) $2,089  
Facility closure and other exit costs  156  (156)   
Total Power$  $2,709  $(620) $2,089  
Consolidated
Severance$  $9,303  $(3,443) $5,860  
Facility closure and other exit costs  1,298  (1,298)   
Total consolidated$  $10,601  $(4,741) $5,860  

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


FORWARD-LOOKING STATEMENTS
 
Except for historical information, this Quarterly Report on Form 10-Q may be deemed to contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Examples of forward-looking statements include, but are not limited to: (a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from COVID-19, and (d) statements of assumptions, such as economic conditions underlying other statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy.  No assurance may be given that the future results described by the forward-looking statements will be achieved.  While we believe these forward-looking statements are reasonable, they are only predictions and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, which could cause actual results, performance, or achievement to differ materially from anticipated future results, performance, or achievement expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” of our 2019 Annual Report on Form 10-K, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission.  Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1. Financial Statements and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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


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

COMPANY ORGANIZATION
 
Curtiss-Wright Corporation is a diversified, multinational provider of highly engineered, technologically advanced, value-added products and services to a broad range of industries which are reported through our Commercial/Industrial, Defense, and Power segments. We are positioned as a market leader across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. We provide products and services to a number of global markets and have achieved balanced growth through the successful application of our core competencies in engineering and precision manufacturing. Our overall strategy is to be a balanced and diversified company, less vulnerable to cycles or downturns in any one market, and to establish strong positions in profitable niche markets. Approximately 50% of our 2020 revenues are expected to be generated from defense-related markets.

COVID-19

COVID-19, which was characterized as a pandemic by the World Health Organization in March 2020, has slowed our supply chains and production levels, resulted in significant travel restrictions, and created significant disruption of the financial markets. While the pandemic negatively impacted demand in the second quarter, primarily in the commercial aerospace and general industrial end markets, it did not have a material impact on our results of operations during the first quarter. The commercial aerospace and general industrial end markets are expected to be negatively impacted for the foreseeable future, the extent of which is contingent upon future developments. These future developments, which are highly uncertain and unpredictable, include new information concerning the severity and duration of the outbreak as well as impacts to our supply chain, transportation networks, and customers.

The health and safety of our employees has remained our top priority throughout this crisis. The vast majority of our manufacturing facilities have remained operational throughout the pandemic due to the critical nature of both our operations as well as our customers’ operations, with all manufacturing facilities open and operating as of June 30, 2020. We have continued to execute safety measures at all of our facilities to protect the health and safety of our employees and visitors, including increased frequency in cleaning and disinfecting as well as implementing rigorous hygiene and social distancing practices. In addition, a significant portion of our non-manufacturing employees are currently working remotely in an effort to minimize any potential spread of COVID-19. These working conditions have been designed to allow for the continuation of key business-critical operations, including financial reporting and internal control.

Given the diversified breadth of our company, we believe that we are well-positioned to mitigate any material risks arising as a result of COVID-19. From an operational perspective, our current cash balance, coupled with expected cash flows from operating activities for the remainder of the year as well as our current borrowing capacity under the Revolving Credit Agreement, are expected to be more than sufficient to meet operating cash requirements, planned capital expenditures, interest payments on long-term debt obligations, payments on lease obligations, pension and postretirement funding requirements, and dividend payments through at least the remainder of the year. In May 2020, we took additional actions to strengthen our financial flexibility through the pricing of $300 million of senior notes. The transaction is expected to close no later than August 13, 2020, with the proceeds intended to be used for general corporate purposes. We will continue to diligently monitor business conditions and consider additional actions, as necessary. However, given the current level of uncertainty regarding potential COVID-19 economic impacts, we are unable to predict whether we will experience increased borrowing costs or other costs of capital which in turn could potentially result in future liquidity issues. See Part II, Item 1A. “Risk Factors” for a detailed description of the risks resulting from the COVID-19 pandemic.

RESULTS OF OPERATIONS
 
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three and six month periods ended June 30, 2020. The financial information as of June 30, 2020 should be read in conjunction with the consolidated financial statements for the year ended December 31, 2019 contained in our Form 10-K.

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

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

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

Analytical Definitions

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

Condensed Consolidated Statements of Earnings
 Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)20202019% change20202019% change
Sales      
Commercial/Industrial$213,648  $292,900  (27 %)$478,016  $562,758  (15 %)
Defense169,955  158,492  %336,066  292,275  15 %
Power166,444  187,604  (11 %)337,196  362,277  (7 %)
Total sales$550,047  $638,996  (14 %)$1,151,278  $1,217,310  (5 %)
Operating income      
Commercial/Industrial$14,366  $51,376  (72 %)$49,353  $86,581  (43 %)
Defense27,872  32,607  (15 %)56,576  53,339  %
Power21,259  31,983  (34 %)41,881  57,364  (27 %)
Corporate and eliminations(8,148) (10,281) 21 %(20,015) (19,554) (2 %)
Total operating income$55,349  $105,685  (48 %)$127,795  $177,730  (28 %)
Interest expense8,515  7,960  %16,004  15,232  %
Other income (expense), net(4,105) 5,871  (170 %)1,427  11,349  (87 %)
Earnings before income taxes42,729  103,596  (59 %)113,218  173,847  (35 %)
Provision for income taxes(11,711) (23,524) (50 %)(30,439) (38,182) (20 %)
Net earnings$31,018  $80,072   $82,779  $135,665   
Restructuring-related expenses$14,596  $—  NM$17,380  $—  NM
New orders$620,249  $600,769  %$1,190,050  $1,347,507  (12 %)
NM - Not meaningful

Components of sales and operating income increase (decrease):
Page 23


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

Three Months EndedSix Months Ended
June 30,June 30,
2020 vs. 20192020 vs. 2019
SalesOperating IncomeSalesOperating Income
Organic(17 %)(35 %)(8 %)(19 %)
Acquisitions%(1 %)%— %
Restructuring— %(13 %)— %(10 %)
Foreign currency— %%— %%
Total(14 %)(48 %)(5 %)(28 %)

Sales in the second quarter decreased $89 million, or 14%, to $550 million, compared with the prior year period. On a segment basis, sales from the Commercial/Industrial and Power segments decreased $79 million and $21 million, respectively, with sales from the Defense segment increasing $11 million.

Sales during the six months ended June 30, 2020 decreased $66 million, or 5%, to $1,151 million, compared with the prior year period. On a segment basis, sales from the Commercial/Industrial and Power segments decreased $85 million and $25 million, respectively, with sales from the Defense segment increasing $44 million. Changes in sales by segment are discussed in further detail in the results by business segment section below.

Operating income in the second quarter decreased $50 million, or 48%, to $55 million, and operating margin decreased 640 basis points to 10.1% compared with the same period in 2019. Operating income during the six months ended June 30, 2020 decreased $50 million, or 28%, to $128 million and operating margin decreased 350 basis points to 11.1%, compared with the same period in 2019. The decreases in operating income and operating margin for each of the respective periods were primarily due to unfavorable overhead absorption on lower sales in the Commercial/Industrial and Power segments, costs associated with our restructuring activities across all segments, and first year purchase accounting costs from our 901D acquisition in the Defense segment. These decreases were partially offset by the benefits of our ongoing margin improvement initiatives, which were recognized across all segments.

Non-segment operating expense in the second quarter decreased $2 million, or 21 %, to $8 million, primarily due to lower corporate costs. Non-segment operating expense during the six months ended June 30, 2020 of $20 million was essentially flat compared to the prior year period.

Interest expense during the second quarter and six months ended June 30, 2020 of $9 million and $16 million, respectively, was essentially flat against the comparable prior year periods.

Other income (expense), net in the second quarter and six months ended June 30, 2020 decreased $10 million to ($4) million and $1 million, respectively, primarily due to the recognition of accumulated foreign currency translation losses of $10 million related to the substantial liquidation of our Norwegian subsidiary.

The effective tax rate of 27.4% in the second quarter increased compared to an effective tax rate of 22.7% in the prior year period. This increase was primarily driven by the recognition of accumulated foreign currency translation losses related to the substantial liquidation of our Norwegian subsidiary, which are not deductible for tax purposes. The effective tax rate of 26.9% for the six months ended June 30, 2020 increased as compared to an effective tax rate of 22.0% in the prior year period. This increase was primarily due to the aforementioned foreign currency translation losses as well as additional tax expense associated with the establishment of a valuation allowance against certain foreign deferred tax assets.

Comprehensive income in the second quarter was $59 million, compared to comprehensive income of $82 million in the prior year period. The change was primarily due to the following:

Net earnings decreased $49 million, primarily due to lower operating income and higher other expense, net.
Page 24


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

Foreign currency translation adjustments in the second quarter resulted in a $24 million comprehensive gain, compared to a $1 million comprehensive gain in the prior year period. The comprehensive gain during the current period was primarily attributed to increases in the Canadian dollar.

Comprehensive income for the six months ended June 30, 2020 was $65 million, compared to comprehensive income of $148 million in the prior year period. The change was primarily due to the following:

Net earnings decreased $53 million, primarily due to lower operating income and lower other income, net.
Foreign currency translation adjustments for the six months ended June 30, 2020 resulted in a $26 million comprehensive loss, compared to a $9 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.

New orders increased $19 million during the second quarter from the comparable prior year period, primarily due to the timing of naval defense orders in the Defense and Power segments. These increases were partially offset by a decline in new orders for sensors and controls equipment as well as industrial vehicle and valve products in the Commercial/Industrial segment.

New orders decreased $157 million during the six months ended June 30, 2020 from the comparable prior year period. The decrease was primarily due to a decline in new orders for sensors and controls equipment as well as industrial vehicle and valve products in the Commercial/Industrial segment.

RESULTS BY BUSINESS SEGMENT

Commercial/Industrial

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

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)20202019% change20202019% change
Sales$213,648  $292,900  (27 %)$478,016  $562,758  (15 %)
Operating income14,366  51,376  (72 %)49,353  86,581  (43 %)
Operating margin6.7 %17.5 %(1,080 bps) 10.3 %15.4 %(510 bps) 
Restructuring-related expenses$6,766  $—  NM$7,368  $—  NM
New orders$152,622  $270,670  (44 %)$398,624  $546,175  (27 %)
NM - Not meaningful

Components of sales and operating income increase (decrease):
Three Months EndedSix Months Ended
June 30,June 30,
2020 vs. 20192020 vs. 2019
SalesOperating IncomeSalesOperating Income
Organic(28 %)(59 %)(16 %)(35 %)
Acquisitions%— %%— %
Restructuring— %(14 %)— %(9 %)
Foreign currency— %%— %%
Total(27 %)(72 %)(15 %)(43 %)

Sales in the Commercial/Industrial segment are primarily generated from the commercial aerospace and general industrial markets, and to a lesser extent the defense and power generation markets.
Page 25


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


Sales in the second quarter decreased $79 million, or 27%, to $214 million from the prior year period, primarily due to lower sales in the commercial aerospace and general industrial markets. In the commercial aerospace market, sales decreased $34 million, primarily due to lower demand for actuation and sensors equipment as well as surface treatment services. Sales in the general industrial market decreased $45 million, primarily due to lower sales of industrial vehicle products, industrial valve products, and surface treatment services of $20 million, $11 million, and $8 million, respectively.

Sales during the six months ended June 30, 2020 decreased $85 million, or 15%, to $478 million from the prior year period, primarily due to lower sales in the commercial aerospace and general industrial markets. In the commercial aerospace market, sales decreased $30 million, primarily due to lower demand for actuation and sensors equipment as well as surface treatment services. Sales in the general industrial market decreased $67 million, primarily due to lower sales of industrial vehicle products, industrial valve products, and surface treatment services of $32 million, $14 million, and $13 million, respectively. These decreases were partially offset by higher sales of $9 million in the aerospace defense market, primarily due to higher demand for actuation systems on the F-35 fighter jet program.

Operating income in the second quarter decreased $37 million, or 72%, to $14 million from the prior year period, and operating margin decreased 1,080 basis points to 6.7%. Operating income during the six months ended June 30, 2020 decreased $37 million, or 43%, to $49 million from the prior year period, and operating margin decreased 510 basis points to 10.3%. The decreases in operating income and operating margin for each of the respective periods were primarily due to unfavorable overhead absorption on lower sales in the general industrial and commercial aerospace markets as well as costs associated with our restructuring activities. These decreases were partially offset by the benefits of our ongoing margin improvement initiatives.

New orders during the second quarter and six months ended June 30, 2020 decreased $118 million and $148 million, respectively, from the comparable prior year periods, primarily due to a decline in new orders for sensors and controls equipment as well as industrial vehicle and valve products.

Defense

The following tables summarize sales, operating income and margin, and new orders within the Defense segment.
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)20202019% change20202019% change
Sales$169,955  $158,492  %$336,066  $292,275  15 %
Operating income27,872  32,607  (15 %)56,576  53,339  %
Operating margin16.4 %20.6 %(420 bps) 16.8 %18.2 %(140 bps) 
Restructuring-related expenses$1,648  $—  NM$2,447  $—  NM
New orders$280,194  $174,520  61 %$440,330  $391,110  13 %
NM - Not meaningful

Components of sales and operating income increase (decrease):
Three Months EndedSix Months Ended
June 30,June 30,
2020 vs. 20192020 vs. 2019
SalesOperating IncomeSalesOperating Income
Organic(2 %)(11 %)%10 %
Acquisitions%(1 %)10 %(1 %)
Restructuring— %(5 %)— %(5 %)
Foreign currency— %%— %%
Total%(15 %)15 %%

Page 26


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

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

Sales in the second quarter increased $11 million, or 7%, to $170 million from the prior year period, primarily due to higher sales in the naval defense and aerospace defense markets. Sales in the naval defense market increased $22 million, primarily due to the incremental impact of our 901D acquisition, which contributed sales of $12 million. Excluding the impact of 901D, the naval defense market benefited from higher demand for valves and embedded computing equipment on the Virginia-class submarine platform, which resulted in higher sales of $10 million. In the aerospace defense market, sales increased $5 million due to higher demand for embedded computing equipment on various fighter jet and unmanned aerial vehicle (UAV) platforms. These increases were partially offset by lower sales of $7 million in the ground defense market due to lower demand on various domestic and international tank platforms.

Sales during the six months ended June 30, 2020 increased $44 million, or 15%, to $336 million from the prior year period, primarily due to higher sales in the naval defense and aerospace defense markets. Sales in the naval defense market increased $48 million, primarily due to the incremental impact of our 901D acquisition, which contributed sales of $24 million. Excluding the impact of 901D, the naval defense market benefited from higher demand for valves and embedded computing equipment on the Virginia-class submarine platform, which resulted in higher sales of $19 million. In the aerospace defense market, sales increased $19 million, primarily due to higher demand for embedded computing equipment on various fighter jet and UAV platforms. These increases were partially offset by lower sales of $9 million in the commercial aerospace market, primarily due to lower demand for flight test instrumentation equipment. Sales in the ground defense market were negatively impacted by lower demand on various domestic and international tank platforms.

Operating income in the second quarter decreased $5 million, or 15%, to $28 million compared to the prior year period, and operating margin decreased 420 basis points from the prior year period to 16.4%. These decreases were primarily due to costs associated with our restructuring activities as well as first year purchase accounting costs from our 901D acquisition.

Operating income during the six months ended June 30, 2020 increased $3 million, or 6%, to $57 million, while operating margin decreased 140 basis points from the prior year period to 16.8%. Favorable overhead absorption on higher sales as well as the benefits of our ongoing margin improvement initiatives were partially offset by costs associated with our restructuring activities as well as first year purchase accounting costs from our 901D acquisition.

New orders in the second quarter increased $106 million from the comparable prior year period, primarily due to the timing of naval defense orders. This increase was partially offset by the timing of aerospace defense orders.

New orders during the six months ended June 30, 2020 increased $49 million from the comparable prior year period, primarily due to the timing of naval defense orders as well as higher orders for embedded computing equipment in the commercial aerospace market.

Power

The following tables summarize sales, operating income and margin, and new orders within the Power segment.
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)20202019% change20202019% change
Sales$166,444  $187,604  (11 %)$337,196  $362,277  (7 %)
Operating income21,259  31,983  (34 %)41,881  57,364  (27 %)
Operating margin12.8 %17.0 %(420 bps) 12.4 %15.8 %(340 bps) 
Restructuring-related expenses$6,182  $—  NM$7,565  $—  NM
New orders$187,433  $155,579  20 %$351,096  $410,222  (14 %)
NM - Not meaningful

Components of sales and operating income increase (decrease):
Page 27


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

Three Months EndedSix Months Ended
June 30,June 30,
2020 vs. 20192020 vs. 2019
SalesOperating IncomeSalesOperating Income
Organic(11 %)(14 %)(7 %)(14 %)
Acquisitions— %— %— %— %
Restructuring— %(20 %)— %(13 %)
Foreign currency— %— %— %— %
Total(11 %)(34 %)(7 %)(27 %)

Sales in the Power segment are primarily to the power generation and naval defense markets.

Sales in the second quarter decreased $21 million, or 11%, to $166 million from the prior year period, primarily due to lower sales in the naval defense and power generation markets. In the naval defense market, sales decreased $7 million as higher production levels on the Columbia class submarine were more than offset by the timing of production on the CVN-80 aircraft carrier program as well as lower service center sales. Sales in the power generation market decreased $12 million primarily due to lower domestic and international aftermarket sales.

Sales during the six months ended June 30, 2020 decreased $25 million, or 7%, to $337 million from the prior year period, primarily due to lower sales of $22 million in the power generation market. This decrease was primarily due to the lower domestic and international aftermarket sales as well as the timing of production on the China Direct AP1000 program.

Operating income in the second quarter decreased $11 million, or 34%, to $21 million, and operating margin decreased 420 basis points from the prior year period to 12.8%. The decreases in operating income and operating margin were primarily due to costs associated with our restructuring activities as well as unfavorable overhead absorption on lower sales in the naval defense and power generation markets. These decreases were partially offset by the benefits of our ongoing margin improvement initiatives.

Operating income during the six months ended June 30, 2020 decreased $15 million, or 27%, to $42 million, and operating margin decreased 340 basis points from the prior year period to 12.4%. The decreases in operating income and operating margin were primarily due to unfavorable overhead absorption on lower sales in the power generation market, costs associated with our restructuring activities, and transition costs associated with our DRG facility in South Carolina. These decreases were partially offset by the benefits of our ongoing margin improvement initiatives.

New orders during the second quarter and six months ended June 30, 2020 increased $32 million and decreased $59 million, respectively, from the comparable prior year periods, primarily due to the timing of naval defense orders.

SUPPLEMENTARY INFORMATION

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

Page 28


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

Net Sales by End MarketThree Months EndedSix Months Ended
June 30,June 30,
(In thousands)20202019% change20202019% change
Defense markets:
Aerospace$109,305  $104,426  %$211,133  $183,213  15 %
Ground20,029  26,394  (24 %)42,686  47,151  (9 %)
Naval 164,941  149,853  10 %330,633  280,941  18 %
Total Defense$294,275  $280,673  %$584,452  $511,305  14 %
Commercial markets:
Aerospace$71,084  $108,000  (34 %)$171,765  $211,222  (19 %)
Power Generation76,202  93,171  (18 %)160,550  189,652  (15 %)
General Industrial108,486  157,152  (31 %)234,511  305,131  (23 %)
Total Commercial$255,772  $358,323  (29 %)$566,826  $706,005  (20 %)
Total Curtiss-Wright$550,047  $638,996  (14 %)$1,151,278  $1,217,310  (5 %)

Defense markets
Sales in the second quarter increased $14 million, or 5%, to $294 million against the comparable prior year period, primarily due to higher sales in the naval defense and aerospace defense markets. The naval defense market primarily benefited from the impact of our 901D acquisition, which contributed incremental sales of $12 million. Higher sales of $18 million on the Virginia-class and Columbia-class submarine programs were partially offset by the timing of production on the CVN-80 aircraft carrier program as well as lower service center demand, which collectively reduced sales $13 million. Sales in the aerospace defense market increased primarily due to higher demand for embedded computing equipment on various fighter jet and UAV platforms.

Sales during the six months ended June 30, 2020 increased $73 million, or 14%, to $584 million, primarily due to higher sales in the naval defense and aerospace defense markets. The naval defense market benefited from the impact of our 901D acquisition, which contributed incremental sales of $24 million. Excluding the impact of 901D, the naval defense market benefited from higher sales of $26 million on the Virginia-class and Columbia-class submarine programs. Sales in the aerospace defense market increased primarily due to higher actuation systems sales of $11 million on the F-35 fighter jet program and higher demand for embedded computing equipment supporting UAVs, which resulted in a sales increase of $9 million.

Commercial markets
Sales in the second quarter decreased $103 million, or 29%, to $256 million due to lower sales across all segments. Lower demand for actuation and sensors equipment as well as surface treatment services in the commercial aerospace market resulted in sales decreases of $27 million and $8 million, respectively. In the power generation market, we experienced lower demand for domestic and international aftermarket products, which resulted in lower sales of $12 million. Lower demand in the general industrial market for industrial vehicle products, industrial valve products, and surface treatment services resulted in sales decreases of $20 million, $13 million, and $8 million, respectively.

Sales during the six months ended June 30, 2020 decreased $139 million, or 20%, to $567 million due to lower sales across all markets. In the commercial aerospace market, we experienced lower demand for actuation and sensors equipment as well as surface treatment services, which resulted in sales decreases of $29 million and $6 million, respectively. Sales in the power generation market decreased primarily due to lower domestic and international aftermarket sales of $20 million as well as the timing of production on the China Direct AP1000 program. Lower demand in the general industrial market for industrial vehicle products, industrial valve products, and surface treatment services resulted in sales decreases of $32 million, $15 million, and $13 million, respectively.

Page 29


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

LIQUIDITY AND CAPITAL RESOURCES

Sources and Use of Cash

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

Condensed Consolidated Statements of Cash FlowsSix Months Ended
(In thousands)June 30, 2020June 30, 2019
Cash provided by (used in):
Operating activities
$(52,209) $40,386  
Investing activities
(108,916) (74,773) 
Financing activities
(51,942) (26,712) 
Effect of exchange-rate changes on cash(22,583) 1,377  
Net decrease in cash and cash equivalents(235,650) (59,722) 

Net cash used in operating activities increased $93 million from the prior year period, primarily due to a voluntary pension contribution of $150 million as well as higher inventory in the current period. This increase was partially offset by a reduction in receivables during the current period.

Net cash used in investing activities increased $34 million from the comparable prior year period primarily due to higher cash used for acquisitions in the current period. The Corporation acquired two businesses during the six months ended June 30, 2020 for approximately $90 million, inclusive of $82 million cash paid plus an $8 million holdback for potential indemnification claims against the seller. The Corporation acquired one business during the six months ended June 30, 2019 for approximately $50 million.

Financing Activities

Debt

The Corporation’s debt outstanding had an average interest rate of 3.3% and 3.4% for the three and six months ended June 30, 2020, respectively, and 3.7% for both the three and six months ended June 30, 2019. The Corporation’s average debt outstanding was $890 million and $842 million for the three and six months ended June 30, 2020, respectively, and $750 million for both the three and six months ended June 30, 2019.

In May 2020, we announced the pricing of a private placement debt offering of $300 million for senior notes, consisting of $150 million 3.10% notes due in August 2030 and $150 million 3.20% notes due in August 2032. We expect to use the net proceeds from the offering for general corporate purposes, which may include reducing outstanding indebtedness under our revolving credit facility, possible future acquisitions, or funding internal growth initiatives. The offering is expected to close no later than August 13, 2020, subject to customary closing conditions.

Revolving Credit Agreement

As of June 30, 2020, the Corporation had outstanding borrowings of $75 million under the 2018 Senior Unsecured Revolving Credit Agreement (the “Credit Agreement” or “credit facility”) and $22 million in letters of credit supported by the credit
Page 30


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

facility. The unused credit available under the Credit Agreement as of June 30, 2020 was $403 million which could be borrowed without violating any of our debt covenants.

Repurchase of common stock

During the six months ended June 30, 2020, the Corporation used $125 million of cash to repurchase approximately 1,230,000 outstanding shares under its share repurchase program. During the six months ended June 30, 2019, the Corporation used $25 million of cash to repurchase approximately 220,000 outstanding shares under its share repurchase program.

Dividends

The Corporation made dividend payments of $7 million and $6 million during the six months ended June 30, 2020 and June 30, 2019, respectively.

Debt Compliance

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

As of June 30, 2020, we had the ability to borrow additional debt of $1.6 billion without violating our debt to capitalization covenant.

Page 31


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




CRITICAL ACCOUNTING POLICIES

Our condensed consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparation of these statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and assumptions are affected by the application of our accounting policies. Critical accounting policies are those that require application of management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain and may change in subsequent periods. A summary of significant accounting policies and a description of accounting policies that are considered critical may be found in our 2019 Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 27, 2020, in the Notes to the
Consolidated Financial Statements, Note 1, and the Critical Accounting Policies section of Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Page 32



Item 3.                      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
Except for the broad effects of COVID-19 as a result of its negative impact on the financial markets, there have been no material changes in our market risk during the six months ended June 30, 2020.  Information regarding market risk and market risk management policies is more fully described in item “7A.Quantitative and Qualitative Disclosures about Market Risk” of our 2019 Annual Report on Form 10-K.
 
Item 4.                      CONTROLS AND PROCEDURES
 
As of June 30, 2020, our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective as of June 30, 2020 insofar as they are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and they include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
 
During the quarter ended June 30, 2020, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Page 33



PART II - OTHER INFORMATION

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

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

Item 1A.          RISK FACTORS
 
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial condition, or future results. There have been no material changes in the Company’s risk factors from the aforementioned 10-K, except as set forth in the below risk factor.

The COVID-19 pandemic has adversely impacted and poses risks to our business, the nature and extent of which are highly uncertain and unpredictable.

In March 2020, the World Health Organization characterized the outbreak of COVID-19 as a pandemic. While we continue to actively monitor the pandemic and take steps to mitigate the risks posed by its spread, there is no guarantee that our efforts will mitigate the adverse impacts of COVID-19 or will be effective.

The pandemic has adversely affected, and is expected to continue to adversely affect, certain elements of our business, including our supply chain and production levels. We have experienced operational interruptions as a result of COVID-19, including the temporary suspension of operations due to government imposed restrictions at our facilities in Mexico and India. As of June 30, 2020, all of our manufacturing operations have resumed, but we are unable to predict if there will be additional government imposed restrictions on our ability to operate in future periods. Additionally, certain portions of our workforce might not be able to work effectively due to quarantines, government orders and guidance, travel restrictions, and other precautionary measures and restrictions. This could have an adverse effect on the productivity and profitability of such manufacturing facilities, which could in turn adversely impact our business and operations.

We also have experienced and expect to continue to experience unpredictable volatility in demand in our commercial aerospace and general industrial end markets. Several countries, including the United States, have taken steps to restrict air travel, along with many companies, including us, adopting policies which prohibit non-essential business travel by their employees. Even in the absence of formal restrictions and prohibitions, contagious illness and fear of contagion adversely affects travel behavior. Approximately 17% of our net sales for the year ended December 31, 2019 were derived from sales to commercial aerospace customers. Current travel restrictions, as well as changes in the propensity for the general public to travel by air as a result of the COVID-19 pandemic, have caused reductions in demand for commercial aircraft, which will adversely impact our net sales and operating results and may continue to do so for an extended period of time. In addition, an overall reduction in business activity as a result of the disruption caused by COVID-19 has led to a decrease in sales to the general industrial market, which primarily includes industrial vehicle and industrial valve products. Approximately 23% of our net sales for the year ended December 31, 2019 were derived from sales to the general industrial market. While we are unable to predict the magnitude of such impact at this time, the loss of, or significant reduction in, purchases by our large commercial aircraft manufacturers and general industrial customers could have a material adverse effect on our business, financial condition, and results of operations.

If the pandemic continues and conditions worsen, we may continue to experience additional adverse impacts on our operational and commercial activities, costs, customer orders, and collections of accounts receivable, which may be material. In addition, we may also incur additional costs to remedy damages caused by business disruptions, performance delays or interruptions, or payment defaults or bankruptcy of our third-party customers and suppliers, any of which could adversely affect our financial condition and results of operations. Furthermore, the pandemic has impacted and may further impact the broader economies of
Page 34



affected countries, including negatively impacting economic growth. Due to the speed with which the situation is developing, the global breadth of its spread and the range of governmental and community reactions thereto, there is uncertainty around its duration, ultimate impact, and the timing of recovery. Therefore, the pandemic could lead to an extended disruption of economic activity whereby the impact on our consolidated results of operations, financial position and cash flows could be material.

 Item 2.            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
The following table provides information about our repurchase of equity securities that are registered by us pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, during the quarter ended June 30, 2020.

 Total Number of shares purchasedAverage Price Paid per ShareTotal Number of Shares Purchased as Part of a Publicly Announced ProgramMaximum Dollar amount of shares that may yet be Purchased Under the Program
April 1 - April 3044,825  $93.70  1,144,284  $83,942,976  
May 1 - May 3142,174  94.85  1,186,458  79,942,798  
June 1 - June 3045,306  97.12  1,231,764  75,542,749  
For the quarter ended June 30, 2020132,305  $95.24  1,231,764  $75,542,749  

On December 2, 2019, the Corporation adopted two written trading plans in connection with its previously authorized share repurchase program, which allows for the purchase of its outstanding common stock up to $200 million. The first trading plan includes share repurchases of $50 million, to be executed equally throughout the year. The second trading plan, which was completed as of March 31, 2020, included opportunistic share repurchases of $100 million executed through a 10b5-1 program. The Corporation plans to repurchase at least $150 million of its common stock during the 2020 calendar year.

Item 3.                      DEFAULTS UPON SENIOR SECURITIES

None.

Item 4.                      MINE SAFETY DISCLOSURES
 
Not applicable.

Item 5.                      OTHER INFORMATION
 
There have been no material changes in our procedures by which our security holders may recommend nominees to our board of directors during the six months ended June 30, 2020.  Information regarding security holder recommendations and nominations for directors is more fully described in the section entitled “Stockholder Recommendations and Nominations for Director” of our 2020 Proxy Statement on Schedule 14A, which is incorporated by reference to our 2019 Annual Report on Form 10-K.

Page 35


Item 6.                      EXHIBITS

Incorporated by ReferenceFiled
Exhibit No.Exhibit DescriptionFormFiling DateHerewith
3.18-A12B/AMay 24, 2005
3.28-KMay 18, 2015
31.1X
31.2X
32X
101.INSXBRL Instance DocumentX
101.SCHXBRL Taxonomy Extension Schema DocumentX
101.CALXBRL Taxonomy Extension Calculation Linkbase DocumentX
101.DEFXBRL Taxonomy Extension Definition Linkbase DocumentX
101.LABXBRL Taxonomy Extension Label Linkbase DocumentX
101.PREXBRL Taxonomy Extension Presentation Linkbase DocumentX


Page 36


SIGNATURE

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

CURTISS-WRIGHT CORPORATION
(Registrant)

By:  /s/ K. Christopher Farkas
K. Christopher Farkas
Vice President and Chief Financial Officer
Dated: August 4, 2020



Page 37
Document

Exhibit 31.1

Certifications

I, David C. Adams, certify that:

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

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

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

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

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

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

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

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

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

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

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



Date: August 4, 2020

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


Document

Exhibit 31.2

Certifications

I, K. Christopher Farkas, certify that:

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

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

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

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

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

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

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

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

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

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

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



Date: August 4, 2020

/s/ K. Christopher Farkas
K. Christopher Farkas
Vice President and Chief Financial Officer

Document

Exhibit 32

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

In connection with the Quarterly Report of Curtiss-Wright Corporation (the "Company") on Form 10-Q for the period ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), David C. Adams, as Chairman and Chief Executive Officer of the Company, and K. Christopher Farkas, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. section 1350, that to the best of his knowledge:

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

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

/s/ David C. Adams

David C. Adams
Chairman and Chief Executive Officer
August 4, 2020

/s/ K. Christopher Farkas

K. Christopher Farkas
Vice President and Chief Financial Officer
August 4, 2020


v3.20.2
Document and Entity Information - shares
6 Months Ended
Jun. 30, 2020
Jul. 31, 2020
Cover [Abstract]    
Security Exchange Name NYSE  
Title of 12(b) Security Common Stock  
Entity Interactive Data Current Yes  
City Area Code 704  
Entity Address, Address Line One 130 Harbour Place Drive, Suite 300  
Entity Address, City or Town Davidson,  
Entity Address, State or Province NC  
Entity Address, Postal Zip Code 28036  
Entity Incorporation, State or Country Code DE  
Entity File Number 1-134  
Entity Registrant Name CURTISS WRIGHT CORP  
Entity Central Index Key 0000026324  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Jun. 30, 2020  
Document Transition Report false  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q2  
Amendment Flag false  
Entity common stock shares outstanding   41,576,986
Trading Symbol CW  
Entity Current Reporting Status Yes  
Emerging Company false  
Small Business false  
Entity Tax Identification Number 13-0612970  
Local Phone Number 869-4600  
Entity Shell Company false  
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Net Sales        
Net sales $ 550,047 $ 638,996 $ 1,151,278 $ 1,217,310
Total net sales 550,047 638,996 1,151,278 1,217,310
Cost of sales        
Total cost of sales 364,021 408,952 764,673 790,393
Gross profit 186,026 230,044 386,605 426,917
Research and development expenses 18,269 18,900 36,576 36,141
Selling expenses 25,193 30,693 56,781 62,170
General and administrative expenses 76,606 74,766 153,264 150,876
Restructuring Charges 10,609 0 12,189 0
Operating income 55,349 105,685 127,795 177,730
Interest expense (8,515) (7,960) (16,004) (15,232)
Other income (expense), net (4,105) 5,871 1,427 11,349
Earnings from continuing operations before income taxes 42,729 103,596 113,218 173,847
Provision for income taxes (11,711) (23,524) (30,439) (38,182)
Net earnings $ 31,018 $ 80,072 $ 82,779 $ 135,665
Basic earnings per share        
Basic earnings per share (usd per share) $ 0.75 $ 1.87 $ 1.97 $ 3.17
Diluted earnings per share        
Diluted earnings per share (usd per share) 0.74 1.86 1.95 3.15
Dividends per share $ 0.17 $ 0.17 $ 0.34 $ 0.32
Weighted average shares outstanding:        
Basic (shares) 41,629 42,758 42,092 42,776
Diluted (shares) 41,855 43,024 42,362 43,038
Product [Member]        
Product sales $ 466,445 $ 532,253 $ 964,374 $ 1,003,852
Cost of sales        
Cost of Goods and Services Sold 309,152 342,726 639,965 654,682
Service [Member]        
Net Sales        
Net sales 83,602 106,743 186,904 213,458
Cost of sales        
Cost of Goods and Services Sold $ 54,869 $ 66,226 $ 124,708 $ 135,711
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net earnings $ 31,018 $ 80,072 $ 82,779 $ 135,665
Other comprehensive income        
Foreign currency translation, net of tax [1] 24,185 540 (26,090) 8,782
Pension and postretirement adjustments, net of tax [2] 4,002 1,749 8,683 3,432
Other comprehensive income (loss), net of tax 28,187 2,289 (17,407) 12,214
Comprehensive income $ 59,205 $ 82,361 $ 65,372 $ 147,879
[1] The tax benefit included in other comprehensive income (loss) for foreign currency translation adjustments for the three and six months ended June 30, 2020 and June 30, 2019 was immaterial.
[2] The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2020 was $1.3 million and $2.7 million, respectively. The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2019 was $0.6 million and $1.1 million, respectively.
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Statement of Comprehensive Income [Abstract]        
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, Tax, Attributable to Parent [1] $ 1.3 $ 0.6 $ 2.7 $ 1.1
[1] The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2020 was $1.3 million and $2.7 million, respectively. The tax expense included in other comprehensive income for pension and postretirement adjustments for the three and six months ended June 30, 2019 was $0.6 million and $1.1 million, respectively.
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash and cash equivalents $ 155,383 $ 391,033
Receivables, net 598,340 632,194
Inventories, net 461,902 424,835
Other current assets 51,584 81,729
Total current assets 1,267,209 1,529,791
Property, plant, and equipment, net 381,226 385,593
Goodwill 1,197,194 1,166,680
Other intangible assets, net 489,208 479,907
Operating Lease, Right-of-Use Asset 157,526 165,490
Assets for Plan Benefits, Defined Benefit Plan 123,695 0
Other assets 26,613 36,800
Total assets 3,642,671 3,764,261
Current liabilities:    
Accounts payable 171,842 222,000
Accrued expenses 128,800 164,744
Income taxes payable 7,177 7,670
Deferred revenue 263,110 276,115
Other current liabilities 91,049 74,202
Total current liabilities 661,978 744,731
Long-term debt 834,802 760,639
Deferred Income Tax Liabilities, Net 92,941 80,159
Accrued pension and other postretirement benefit costs 90,004 138,635
Long-term operating lease liability 137,213 145,124
Long-term portion of environmental reserves 15,271 15,026
Other liabilities 97,167 105,575
Total liabilities 1,929,376 1,989,889
Stockholders' Equity    
Common stock, $1 par value,100,000,000 shares authorized as of June 30, 2020 and December 31, 2019; 49,187,378 shares issued as of June 30, 2020 and December 31, 2019; outstanding shares were 41,565,240 as of June 30, 2020 and 42,680,215 as of December 31, 2019 49,187 49,187
Additional paid in capital 118,467 116,070
Retained earnings 2,565,727 2,497,111
Accumulated other comprehensive loss (342,681) (325,274)
Common treasury stock, at cost (7,622,138 shares as of June 30, 2020 and 6,507,163 shares as of December 31, 2019) (677,405) (562,722)
Total stockholders' equity 1,713,295 1,774,372
Total liabilities and stockholders' equity $ 3,642,671 $ 3,764,261
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Common stock, par value (usd per share) $ 1 $ 1
Common Stock, Shares Authorized 100,000,000 100,000,000
Common Stock, Shares, Issued 49,187,378 49,187,378
Common Stock, Shares, Outstanding 42,680,215 41,565,240
Treasury Stock, Shares 7,622,138 6,507,163
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Cash flows from operating activities:    
Net earnings $ 82,779 $ 135,665
Adjustments to reconcile net earnings to net cash provided by (used for) operating activities    
Depreciation and amortization 56,568 51,600
Gain on fixed asset disposals (373) (6,080)
Deferred income taxes 4,208 1,450
Share-based compensation 7,140 6,980
Foreign exchange loss on substantial liquidation of subsidiary 9,550 0
Inventory Write-down 9,015 0
Change in operating assets and liabilities, net of businesses acquired and divested:    
Accounts receivable, net 31,898 (37,621)
Inventories, net (40,691) (11,080)
Progress Payments (470) (356)
Accounts payable and accrued expenses (81,848) (87,430)
Deferred revenue (12,622) 5,278
Income taxes payable 26,042 2,872
Net pension and postretirement liabilities (149,514) 311
Other current and long-term assets and liabilities 6,109 (21,203)
Net cash provided by (used for) operating activities (52,209) 40,386
Cash flows from investing activities:    
Proceeds from sales and disposals of long lived assets 2,411 8,920
Payments to Acquire Intangible Assets 0 (147)
Additions to property, plant, and equipment (29,324) (33,471)
Acquisition of businesses, net of cash acquired 82,003 50,075
Net cash used for investing activities (108,916) (74,773)
Cash flows from financing activities:    
Borrowings under revolving credit facility 306,797 7,318
Payment of revolving credit facility (231,797) (7,561)
Repurchases of common stock (124,613) (25,065)
Proceeds from share-based compensation 5,189 5,411
Dividends paid (7,089) (6,420)
Proceeds from (Payments for) Other Financing Activities (429) (395)
Net cash used for financing activities (51,942) (26,712)
Effect of exchange-rate changes on cash (22,583) 1,377
Net decrease in cash and cash equivalents (235,650) (59,722)
Cash and cash equivalents at beginning of period 391,033 276,066
Cash and cash equivalents at end of period 155,383 216,344
Supplemental disclosure of non-cash activities:    
Capital expenditures incurred but not yet paid $ 152 $ 85
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($)
$ in Thousands
Total
Common Stock Member
Additional Paid In Capital Member
Retained Earnings Member
Accumulated Other Comprehensive Loss Member
Treasury Stock Member
Beginning Balance at Dec. 31, 2018   $ 49,187 $ 118,234 $ 2,191,471 $ (288,447) $ (539,664)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings $ 135,665     135,665    
Other Comprehensive Income (Loss), Net of Tax 12,214       12,214  
Dividends paid/declared       (13,690)    
Restricted stock     (5,491)     5,491
Stock options exercised     (1,822)     7,233
Other     (661)     661
Share-based compensation     6,575     405
Repurchases of common stock           (25,065)
Ending Balance at Jun. 30, 2019   49,187 116,835 2,339,703 (302,490) (550,939)
Beginning Balance at Dec. 31, 2018   49,187 118,234 2,191,471 (288,447) (539,664)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Other Comprehensive Income (Loss), Net of Tax (10,570)          
Ending Balance at Dec. 31, 2019 1,774,372 49,187 116,070 2,497,111 (325,274) (562,722)
Beginning Balance at Mar. 31, 2019   49,187 114,696 2,266,902 (304,779) (540,426)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings 80,072     80,072    
Other Comprehensive Income (Loss), Net of Tax 2,289       2,289  
Dividends paid/declared       (7,271)    
Stock options exercised     (1,303)     2,038
Share-based compensation     3,442     43
Repurchases of common stock           (12,594)
Ending Balance at Jun. 30, 2019   49,187 116,835 2,339,703 (302,490) (550,939)
Cumulative Effect of New Accounting Principle in Period of Adoption | Accounting Standards Update 2018-02 [Member]       26,257 (26,257)  
Beginning Balance at Dec. 31, 2019 1,774,372 49,187 116,070 2,497,111 (325,274) (562,722)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings 82,779     82,779    
Other Comprehensive Income (Loss), Net of Tax (17,407)       (17,407)  
Dividends paid/declared       (14,163)    
Restricted stock     (4,115)     4,115
Stock options exercised     106     5,081
Other     (517)     517
Share-based compensation     6,923     217
Repurchases of common stock           (124,613)
Ending Balance at Jun. 30, 2020 1,713,295 49,187 118,467 2,565,727 (342,681) (677,405)
Beginning Balance at Mar. 31, 2020   49,187 114,911 2,541,777 (370,868) (665,170)
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net earnings 31,018     31,018    
Other Comprehensive Income (Loss), Net of Tax 28,187       28,187  
Dividends paid/declared       (7,068)    
Stock options exercised     (244)     365
Share-based compensation     3,800     0
Repurchases of common stock           (12,600)
Ending Balance at Jun. 30, 2020 $ 1,713,295 $ 49,187 $ 118,467 $ 2,565,727 $ (342,681) $ (677,405)
v3.20.2
BASIS OF PRESENTATION
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
BASIS OF PRESENTATION BASIS OF PRESENTATION
Curtiss-Wright Corporation and its subsidiaries (the "Corporation" or the "Company") is a global, diversified manufacturing and service company that designs, manufactures, and overhauls precision components and provides highly engineered products and services to the aerospace, defense, power generation, and general industrial markets.

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

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

Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete on contracts using the over-time revenue recognition accounting method, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2020 and 2019, there were no significant changes in estimated contract costs.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2019 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

On January 1, 2020, the Corporation implemented an organizational change to align its reportable segments more closely with its current business structure. This change resulted in the transfer of two business units, one from the Commercial/Industrial segment to the Defense segment and the other from the Defense segment to the Power segment. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.

Recent accounting pronouncements adopted
ASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. On January 1, 2020, the Company adopted ASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU added a current expected credit loss impairment model to U.S. GAAP based on expected losses rather than incurred losses. As the Corporation is not subject to material trade credit risk, the adoption of this standard did not result in any impact to its allowance for doubtful accounts balance as of January 1, 2020. As a result of adoption, the Corporation will utilize current and historical collection data as well as assess current economic conditions in order to determine expected trade credit losses on a prospective basis.
v3.20.2
REVENUE (Notes)
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue from Contract with Customer [Text Block] REVENUE
The Corporation recognizes revenue when control of a promised good and/or service is transferred to a customer in an amount that reflects the consideration that the Corporation expects to be entitled to in exchange for that good and/or service.

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

The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Revenue recognized on an over-time basis for the three and six months ended June 30, 2020 accounted for approximately 54% and 53%, respectively, of total net sales. Revenue recognized on an over-time basis for both the three and six months ended June 30, 2019 accounted for approximately 48% of total net sales. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Revenue recognized at a point-in-time for the three and six months ended June 30, 2020 accounted for approximately 46% and 47%, respectively, of total net sales. Revenue recognized at a point-in-time for both the three and six months ended June 30, 2019 accounted for approximately 52% of total net sales. Revenue for these types of arrangements is recognized at the point in time in which control is transferred to the customer, typically based upon the terms of delivery.

Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $2.2 billion as of June 30, 2020, of which the Corporation expects to recognize approximately 89% as net sales over the next 12-36 months. The remainder will be recognized thereafter.

Disaggregation of Revenue

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

Total Net Sales by End Market and Customer TypeThree Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Defense
Aerospace$109,305  $104,426  $211,133  $183,213  
Ground20,029  26,394  42,686  47,151  
Naval164,941  149,853  330,633  280,941  
Total Defense Customers$294,275  $280,673  $584,452  $511,305  
Commercial
Aerospace$71,084  $108,000  $171,765  $211,222  
Power Generation76,202  93,171  160,550  189,652  
General Industrial108,486  157,152  234,511  305,131  
Total Commercial Customers$255,772  $358,323  $566,826  $706,005  
Total$550,047  $638,996  $1,151,278  $1,217,310  

Contract Balances

Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the three and six months ended June 30, 2020 included in the contract liabilities balance as
of January 1, 2020 was approximately $71 million and $160 million, respectively. Revenue recognized during the three and six months ended June 30, 2019 included in the contract liabilities balance as of January 1, 2019 was approximately $54 million and $133 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.
v3.20.2
ACQUISITIONS
6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
ACQUISITIONS ACQUISITIONS
The Corporation continually evaluates potential acquisitions that either strategically fit within the Corporation’s existing portfolio or expand the Corporation’s portfolio into new product lines or adjacent markets.  The Corporation has completed a number of acquisitions that have been accounted for as business combinations and have resulted in the recognition of goodwill in the Corporation's financial statements.  This goodwill arises because the acquisition purchase price reflects the future earnings and cash flow potential in excess of the earnings and cash flows attributable to the current product and customer set at the time of acquisition.  Thus, goodwill inherently includes the know-how of the assembled workforce, the ability of the workforce to further improve the technology and product offerings, and the expected cash flows resulting from these efforts. Goodwill may also include expected synergies resulting from the complementary strategic fit these businesses bring to existing operations.

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

During the six months ended June 30, 2020, the Corporation acquired two businesses for an aggregate purchase price of $90 million, which are described in more detail below. During the six months ended June 30, 2019, the Corporation acquired one business for an aggregate purchase price of $50 million, which is described in more detail below.

The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2020 includes $7 million of total net sales and $1 million of net losses from the Corporation's 2020 acquisitions. The Condensed Consolidated Statement of Earnings for the six months ended June 30, 2019 includes $4 million of total net sales and $1 million of net losses from the Corporation's 2019 acquisition.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition for all acquisitions consummated during the six months ended June 30, 2020 and 2019.

(In thousands)20202019
Accounts receivable$3,204  $2,300  
Inventory10,233  322  
Property, plant, and equipment1,332  648  
Other current and non-current assets188  479  
Intangible assets39,384  26,000  
Operating lease right-of-use assets, net1,992  1,393  
Current and non-current liabilities(10,590) (3,252) 
Net tangible and intangible assets45,743  27,890  
Goodwill43,862  22,185  
Total purchase price$89,605  $50,075  
Cash paid to date, net of cash acquired$82,003  $50,075  
Due to seller7,602  —  
Total purchase price$89,605  $50,075  
Goodwill deductible for tax purposes$38,469  $22,185  
2020 Acquisitions

Integrated Air Defense System (IADS)

On April 20, 2020, the Corporation acquired the IADS product line for approximately $29 million. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type. IADS is a real-time display and post-test analysis product for flight tests. The acquired product line operates within the Defense segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

Dyna-Flo Control Valve Services Ltd. (Dyna-Flo)

On February 26, 2020, the Corporation acquired 100% of the issued and outstanding share capital of Dyna-Flo for approximately $60 million, net of cash acquired. The Asset Purchase Agreement contains representations and warranties customary for a transaction of this type, including a portion of the purchase price held back as security for potential indemnification claims against the seller. Dyna-Flo specializes in control valves, actuators, and control systems for the chemical, petrochemical, and oil and gas markets. The acquired business operates within the Commercial/Industrial segment. The acquisition is subject to post-closing adjustments with the purchase price allocation not yet complete.

2019 Acquisition

Tactical Communications Group (TCG)
On March 15, 2019, the Corporation acquired 100% of the membership interests of TCG for $50 million, net of cash acquired. The Purchase Agreement contains a purchase price adjustment mechanism and representations and warranties customary for a transaction of this type, including a portion of the purchase price deposited in escrow as security for potential indemnification claims against the seller. TCG is a designer and manufacturer of tactical data link software solutions for critical military communications systems. The acquired business operates within the Defense segment.
v3.20.2
RECEIVABLES
6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
RECEIVABLES RECEIVABLES
Receivables primarily include amounts billed to customers, unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed, and other receivables.  Substantially all amounts of unbilled receivables are expected to be billed and collected within one year. An immaterial amount of unbilled receivables are subject to retainage provisions. The amount of claims and unapproved change orders within our receivables balances are immaterial.

The composition of receivables is as follows:
(In thousands)June 30, 2020December 31, 2019
Billed receivables:
Trade and other receivables$361,749  $418,968  
Less: Allowance for doubtful accounts
(11,066) (8,733) 
Net billed receivables350,683  410,235  
Unbilled receivables (contract assets):
Recoverable costs and estimated earnings not billed257,185  231,067  
Less: Progress payments applied
(9,528) (9,108) 
Net unbilled receivables247,657  221,959  
Receivables, net$598,340  $632,194  
v3.20.2
INVENTORIES
6 Months Ended
Jun. 30, 2020
Inventory, Net [Abstract]  
INVENTORIES INVENTORIESInventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year. Long-term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost or net realizable value.
The composition of inventories is as follows:
(In thousands)June 30, 2020December 31, 2019
Raw materials$177,200  $153,876  
Work-in-process107,566  100,359  
Finished goods124,698  108,329  
Inventoried costs related to U.S. Government and other long-term contracts (1)
59,773  70,414  
Inventories, net of reserves469,237  432,978  
Less:  Progress payments applied(7,335) (8,143) 
Inventories, net$461,902  $424,835  

(1) As of June 30, 2020 and December 31, 2019, this caption also includes capitalized contract development costs of $32.4 million and $39.1 million, respectively, related to certain aerospace and defense programs. These capitalized costs will be liquidated as units are produced under contract. As of June 30, 2020 and December 31, 2019, capitalized development costs of $16.5 million and $23.7 million, respectively, are not currently supported by existing firm orders.
v3.20.2
GOODWILL
6 Months Ended
Jun. 30, 2020
Goodwill [Abstract]  
GOODWILL GOODWILL
The changes in the carrying amount of goodwill for the six months ended June 30, 2020 are as follows:
(In thousands)Commercial/IndustrialDefensePowerConsolidated
December 31, 2019$431,082  $526,955  $208,643  $1,166,680  
Acquisitions29,233  14,629  —  43,862  
Adjustments—  (1,386) —  (1,386) 
Foreign currency translation adjustment(5,334) (5,942) (686) (11,962) 
June 30, 2020$454,981  $534,256  $207,957  $1,197,194  
v3.20.2
OTHER INTANGIBLE ASSETS, NET
6 Months Ended
Jun. 30, 2020
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
OTHER INTANGIBLE ASSETS, NET OTHER INTANGIBLE ASSETS, NET
 
The following tables present the cumulative composition of the Corporation’s intangible assets:
June 30, 2020December 31, 2019
(In thousands)GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Technology$262,861  $(145,060) $117,801  $257,676  $(140,390) $117,286  
Customer related intangibles459,417  (229,179) 230,238  434,492  (215,855) 218,637  
Programs (1)
144,000  (16,200) 127,800  144,000  (12,600) 131,400  
Other intangible assets45,902  (32,533) 13,369  43,729  (31,145) 12,584  
Total$912,180  $(422,972) $489,208  $879,897  $(399,990) $479,907  
(1) Programs include values assigned to major programs of acquired businesses and represent the aggregate value associated with the customer relationships, contracts, technology, and trademarks underlying the associated program. 

During the six months ended June 30, 2020, the Corporation acquired intangible assets of $39.4 million. The Corporation acquired Customer-related intangibles of $28.9 million, Technology of $8.1 million, and Other intangible assets of $2.4 million, which have weighted average amortization periods of 19.4 years, 15.0 years, and 7.5 years, respectively.

Total intangible amortization expense for the six months ended June 30, 2020 was $28.7 million, as compared to $22.6 million in the comparable prior year period.  The estimated amortization expense for the five years ending December 31, 2020 through 2024 is $58 million, $48 million, $45 million, $41 million, and $38 million, respectively.
v3.20.2
FAIR VALUE OF FINANCIAL INSTRUMENTS
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS FAIR VALUE OF FINANCIAL INSTRUMENTS 
Forward Foreign Exchange and Currency Option Contracts
 
The Corporation has foreign currency exposure primarily in the United Kingdom, Europe, and Canada.  The Corporation uses financial instruments, such as forward and option contracts, to hedge a portion of existing and anticipated foreign currency denominated transactions.  The purpose of the Corporation’s foreign currency risk management program is to reduce volatility in earnings caused by exchange rate fluctuations.  Guidance on accounting for derivative instruments and hedging activities requires companies to recognize all of the derivative financial instruments as either assets or liabilities at fair value in the Condensed Consolidated Balance Sheets based upon quoted market prices for comparable instruments.
 
Interest Rate Risks and Related Strategies
 
The Corporation’s primary interest rate exposure results from changes in U.S. dollar interest rates. The Corporation’s policy is to manage interest cost using a mix of fixed and variable rate debt. The Corporation periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Corporation exchanges, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. The Corporation’s foreign exchange contracts and interest rate swaps are considered Level 2 instruments which are based on market based inputs or unobservable inputs and corroborated by market data such as quoted prices, interest rates, or yield curves.

Effects on Condensed Consolidated Balance Sheets

As of June 30, 2020 and December 31, 2019, the fair values of the asset and liability derivative instruments were immaterial.

Effects on Condensed Consolidated Statements of Earnings
 
Undesignated hedges

For the three and six months ended June 30, 2020 and 2019, the gains or (losses) recognized in income on forward exchange derivative contracts not designated for hedge accounting were as follows:

Three Months EndedSix Months Ended
(In thousands)June 30,June 30,
Derivatives not designated as hedging instrument2020201920202019
Forward exchange contracts:
General and administrative expenses$700  $(2,158) $(7,432) $1,431  

Debt

The estimated fair value amounts were determined by the Corporation using available market information that is primarily based on quoted market prices for the same or similar issuances as of June 30, 2020.  Accordingly, all of the Corporation’s debt is valued as a Level 2 financial instrument.  The fair values described below may not be indicative of net realizable value or reflective of future fair values.  Furthermore, the use of different methodologies to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date.
June 30, 2020December 31, 2019
(In thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Revolving credit agreement, due 2024$75,000  $75,000  $—  $—  
3.84% Senior notes due 2021
100,000  102,137  100,000  102,079  
3.70% Senior notes due 2023
202,500  209,416  202,500  207,882  
3.85% Senior notes due 2025
90,000  95,028  90,000  93,838  
4.24% Senior notes due 2026
200,000  217,026  200,000  213,126  
4.05% Senior notes due 2028
67,500  72,655  67,500  71,260  
4.11% Senior notes due 2028
90,000  97,159  90,000  95,607  
Total debt825,000  868,421  750,000  783,792  
Debt issuance costs, net(534) (534) (594) (594) 
Unamortized interest rate swap proceeds10,336  10,336  11,233  11,233  
Total debt, net$834,802  $878,223  $760,639  $794,431  
v3.20.2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS
6 Months Ended
Jun. 30, 2020
Retirement Benefits, Description [Abstract]  
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS PENSION PLANS
Defined Benefit Pension Plans

The following table is a consolidated disclosure of all domestic and foreign defined pension plans as described in the Corporation’s 2019 Annual Report on Form 10-K.  

The components of net periodic pension cost for the three and six months ended June 30, 2020 and 2019 were as follows:

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Service cost$6,611  $5,825  $13,222  $11,651  
Interest cost6,058  7,371  12,116  14,743  
Expected return on plan assets(16,896) (14,882) (33,792) (29,766) 
Amortization of prior service cost(71) (70) (142) (141) 
Amortization of unrecognized actuarial loss5,750  2,592  11,499  5,184  
Net periodic pension cost$1,452  $836  $2,903  $1,671  

During the six months ended June 30, 2020, the Corporation made a $150 million voluntary contribution to the Curtiss-Wright Pension Plan. The Corporation does not expect to make any further contributions to the Curtiss-Wright Pension Plan in 2020. Contributions to the foreign benefit plans are not expected to be material in 2020.

Defined Contribution Retirement Plan

Effective January 1, 2014, all non-union employees who were not currently receiving final or career average pay benefits became eligible to receive employer contributions in the Corporation’s sponsored 401(k) plan. The employer contributions include both employer match and non-elective contribution components up to a maximum employer contribution of 7% of eligible compensation. During the three and six months ended June 30, 2020, the expense relating to the plan was $4.3 million and $10.3 million, respectively. During the three and six months ended June 30, 2019, the expense relating to the plan was $4.2 million and $9.6 million, respectively. The Corporation made $14.0 million in contributions to the plan during the six months ended June 30, 2020, and expects to make total contributions of $18.3 million in 2020.
v3.20.2
EARNINGS PER SHARE
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
EARNINGS PER SHARE EARNINGS PER SHARE
 
Diluted earnings per share was computed based on the weighted-average number of shares outstanding plus all potentially dilutive common shares.  A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
 
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Basic weighted-average shares outstanding41,629  42,758  42,092  42,776  
Dilutive effect of stock options and deferred stock compensation226  266  270  262  
Diluted weighted-average shares outstanding41,855  43,024  42,362  43,038  
For the three and six months ended June 30, 2020 and 2019, there were no anti-dilutive equity-based awards.
v3.20.2
SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATION
 
The Corporation manages and evaluates its operations based on end markets to strengthen its ability to service customers and recognize certain organizational efficiencies. Based on this approach, the Corporation has three reportable segments: Commercial/Industrial, Defense, and Power.

The Corporation’s measure of segment profit or loss is operating income. Interest expense and income taxes are not reported on an operating segment basis as they are not considered in the segments’ performance evaluation by the Corporation’s chief operating decision-maker, its Chief Executive Officer.
Net sales and operating income by reportable segment were as follows:
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Net sales
Commercial/Industrial$213,814  $293,149  $478,314  $563,309  
Defense170,025  158,629  336,176  292,538  
Power166,684  188,419  337,688  363,454  
Less: Intersegment revenues(476) (1,201) (900) (1,991) 
Total consolidated$550,047  $638,996  $1,151,278  $1,217,310  
Operating income (expense)
Commercial/Industrial$14,366  $51,376  $49,353  $86,581  
Defense27,872  32,607  56,576  53,339  
Power21,259  31,983  41,881  57,364  
Corporate and eliminations (1)
(8,148) (10,281) (20,015) (19,554) 
Total consolidated$55,349  $105,685  $127,795  $177,730  

(1) Corporate and eliminations includes service costs related to pension and other postretirement benefits, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.

Adjustments to reconcile operating income to earnings before income taxes are as follows:
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Total operating income$55,349  $105,685  $127,795  $177,730  
Interest expense8,515  7,960  16,004  15,232  
Other income (expense), net(4,105) 5,871  1,427  11,349  
Earnings before income taxes$42,729  $103,596  $113,218  $173,847  

(In thousands)June 30, 2020December 31, 2019
Identifiable assets
Commercial/Industrial$1,385,177  $1,363,592  
Defense1,198,054  1,209,706  
Power885,353  885,727  
Corporate and Other174,087  305,236  
Total consolidated$3,642,671  $3,764,261  
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
6 Months Ended
Jun. 30, 2020
Stockholders' Equity Note [Abstract]  
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
 
The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:
 
(In thousands)Foreign currency translation adjustments, netTotal pension and postretirement adjustments, netAccumulated other comprehensive income (loss)
December 31, 2018$(147,148) $(141,299) $(288,447) 
Other comprehensive income (loss) before reclassifications
18,447  (35,212) (16,765) 
Amounts reclassified from accumulated other comprehensive loss
—  6,195  6,195  
Net current period other comprehensive loss18,447  (29,017) (10,570) 
Cumulative effect from adoption of ASU 2018-02
$(1,318) $(24,939) $(26,257) 
December 31, 2019$(130,019) $(195,255) $(325,274) 
Other comprehensive income (loss) before reclassifications
(26,090) 316  (25,774) 
Amounts reclassified from accumulated other comprehensive income (loss)
—  8,367  8,367  
Net current period other comprehensive income (loss)(26,090) 8,683  (17,407) 
June 30, 2020$(156,109) $(186,572) $(342,681) 

Details of amounts reclassified from accumulated other comprehensive income (loss) are below:
 
(In thousands)Amount reclassified from AOCIAffected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
Amortization of prior service costs$470  Other income (expense), net
Amortization of actuarial losses(11,497) Other income (expense), net
(11,027) Earnings before income taxes
2,660  Provision for income taxes
Total reclassifications$(8,367) Net earnings
v3.20.2
CONTINGENCIES AND COMMITMENTS
6 Months Ended
Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
CONTINGENCIES AND COMMITMENTS CONTINGENCIES AND COMMITMENTS
Legal Proceedings

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

Letters of Credit and Other Financial Arrangements

The Corporation enters into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to guarantees of repayment, future performance on certain contracts to provide products and services, and to secure advance payments from certain international customers. As of June 30, 2020 and December 31, 2019, there were $21.8 million and $32.6 million of stand-by letters of credit outstanding, respectively, and $6.4 million and $10.8 million of bank guarantees outstanding, respectively. In addition, the Corporation is required to provide the Nuclear Regulatory Commission financial assurance demonstrating its ability to cover the cost of decommissioning its Cheswick, Pennsylvania facility upon closure, though the Corporation does not intend to close this facility.  The Corporation has provided this financial assurance in the form of a $45.6 million surety bond.

AP1000 Program
The Electro-Mechanical Division, which is within the Corporation’s Power segment, is the reactor coolant pump (RCP) supplier for the Westinghouse AP1000 nuclear power plants under construction in China and the United States.  The terms of the AP1000 China and United States contracts include liquidated damage penalty provisions for failure to meet contractual delivery dates if the Corporation caused the delay and the delay was not excusable. On October 10, 2013, the Corporation received a letter from Westinghouse stating entitlements to the maximum amount of liquidated damages allowable under the AP1000 China contract from Westinghouse of approximately $25 million. The Corporation would be liable for liquidated damages under the contract if certain contractual delivery dates were not met and if the Corporation was deemed responsible for the delay. As of June 30, 2020, the Corporation has not met certain contractual delivery dates under its AP 1000 China and U.S. contracts; however there are significant uncertainties as to which parties are responsible for the delays. The Corporation believes it has adequate legal defenses and intends to vigorously defend this matter. Given the uncertainties surrounding the responsibility for the delays, no accrual has been made for this matter as of June 30, 2020.  As of June 30, 2020, the range of possible loss is $0 to $31 million for the AP1000 U.S. contract, for a total range of possible loss of $0 to $55.5 million.
v3.20.2
RESTRUCTURING COSTS
6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Restructuring and Related Activities Disclosure RESTRUCTURING COSTS
During the three and six months ended June 30, 2020, the Corporation executed restructuring activities across all of its segments to support its ongoing effort of improving capacity utilization and operating efficiency. These restructuring activities, which include workforce reductions and consolidation of facilities, resulted in $15 million and $17 million of pre-tax charges for the three and six months ended June 30, 2020. Included in the aforementioned amounts for the three and six months ended June 30, 2020 were approximately $6 million and $7 million of non-cash charges, respectively, related to inventory write-downs and impairments of property, plant, and equipment and operating lease right-of-use assets. Inventory write-downs and asset impairments are reported in "Cost of product sales" and "Restructuring expenses," respectively, within the Condensed Consolidated Statement of Earnings. Pre-tax restructuring charges for the year ending December 31, 2020 are expected to be $35 million. The Company anticipates that these actions, which are expected to be substantially completed by the end of 2020, will result in total cost savings of approximately $40 million annually.

The following tables summarize the respective accrual balances related to these restructuring activities:
In thousandsRestructuring Accrual as of December 31, 2019ProvisionCash PaymentsRestructuring Accrual as of June 30, 2020
Commercial/Industrial
Severance$—  $4,319  $(1,083) $3,236  
Facility closure and other exit costs—  1,102  (1,102) —  
Total Commercial/Industrial$—  $5,421  $(2,185) $3,236  
Defense
Severance$—  $2,431  $(1,896) $535  
Facility closure and other exit costs—  40  (40) —  
Total Defense$—  $2,471  $(1,936) $535  
Power
Severance$—  $2,553  $(464) $2,089  
Facility closure and other exit costs—  156  (156) —  
Total Power$—  $2,709  $(620) $2,089  
Consolidated
Severance$—  $9,303  $(3,443) $5,860  
Facility closure and other exit costs—  1,298  (1,298) —  
Total consolidated$—  $10,601  $(4,741) $5,860  
v3.20.2
BASIS OF PRESENTATION (Policies)
6 Months Ended
Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis Of Accounting
Curtiss-Wright Corporation and its subsidiaries (the "Corporation" or the "Company") is a global, diversified manufacturing and service company that designs, manufactures, and overhauls precision components and provides highly engineered products and services to the aerospace, defense, power generation, and general industrial markets.

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

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

Management is required to make estimates and judgments that affect the reported amount of assets, liabilities, revenue, and expenses and disclosure of contingent assets and liabilities in the accompanying financial statements. Actual results may differ from these estimates. The most significant of these estimates includes the estimate of costs to complete on contracts using the over-time revenue recognition accounting method, cash flow estimates used for testing the recoverability of assets, pension plan and postretirement obligation assumptions, estimates for inventory obsolescence, fair value estimates around assets and assumed liabilities from acquisitions, estimates for the valuation and useful lives of intangible assets, legal reserves, and the estimate of future environmental costs. Changes in estimates of contract sales, costs, and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. Accordingly, the effect of the changes on future periods of contract performance is recognized as if the revised estimate had been the original estimate. During the three and six months ended June 30, 2020 and 2019, there were no significant changes in estimated contract costs.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Corporation’s 2019 Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of trends or of the operating results for a full year.

On January 1, 2020, the Corporation implemented an organizational change to align its reportable segments more closely with its current business structure. This change resulted in the transfer of two business units, one from the Commercial/Industrial segment to the Defense segment and the other from the Defense segment to the Power segment. While this organizational change resulted in the recasting of previously reported amounts across all reportable segments, it did not impact the Corporation’s previously reported consolidated financial statements.
New Accounting Pronouncements, Policy [Policy Text Block] Recent accounting pronouncements adoptedASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. On January 1, 2020, the Company adopted ASU 2016-13 -Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU added a current expected credit loss impairment model to U.S. GAAP based on expected losses rather than incurred losses. As the Corporation is not subject to material trade credit risk, the adoption of this standard did not result in any impact to its allowance for doubtful accounts balance as of January 1, 2020. As a result of adoption, the Corporation will utilize current and historical collection data as well as assess current economic conditions in order to determine expected trade credit losses on a prospective basis.
v3.20.2
REVENUE (Tables)
6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Disaggregation of Revenue
The following table presents the Corporation’s total net sales disaggregated by end market and customer type:

Total Net Sales by End Market and Customer TypeThree Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Defense
Aerospace$109,305  $104,426  $211,133  $183,213  
Ground20,029  26,394  42,686  47,151  
Naval164,941  149,853  330,633  280,941  
Total Defense Customers$294,275  $280,673  $584,452  $511,305  
Commercial
Aerospace$71,084  $108,000  $171,765  $211,222  
Power Generation76,202  93,171  160,550  189,652  
General Industrial108,486  157,152  234,511  305,131  
Total Commercial Customers$255,772  $358,323  $566,826  $706,005  
Total$550,047  $638,996  $1,151,278  $1,217,310  
v3.20.2
ACQUISITIONS (Tables)
6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Schedule of Business Acquisitions, by Acquisition [Table Text Block]
(In thousands)20202019
Accounts receivable$3,204  $2,300  
Inventory10,233  322  
Property, plant, and equipment1,332  648  
Other current and non-current assets188  479  
Intangible assets39,384  26,000  
Operating lease right-of-use assets, net1,992  1,393  
Current and non-current liabilities(10,590) (3,252) 
Net tangible and intangible assets45,743  27,890  
Goodwill43,862  22,185  
Total purchase price$89,605  $50,075  
Cash paid to date, net of cash acquired$82,003  $50,075  
Due to seller7,602  —  
Total purchase price$89,605  $50,075  
Goodwill deductible for tax purposes$38,469  $22,185  
v3.20.2
RECEIVABLES (Table)
6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Schedule Of Accounts Notes Loans And Financing Receivable
The composition of receivables is as follows:
(In thousands)June 30, 2020December 31, 2019
Billed receivables:
Trade and other receivables$361,749  $418,968  
Less: Allowance for doubtful accounts
(11,066) (8,733) 
Net billed receivables350,683  410,235  
Unbilled receivables (contract assets):
Recoverable costs and estimated earnings not billed257,185  231,067  
Less: Progress payments applied
(9,528) (9,108) 
Net unbilled receivables247,657  221,959  
Receivables, net$598,340  $632,194  
v3.20.2
INVENTORIES (Table)
6 Months Ended
Jun. 30, 2020
Inventory, Net [Abstract]  
Schedule Of Inventory
(In thousands)June 30, 2020December 31, 2019
Raw materials$177,200  $153,876  
Work-in-process107,566  100,359  
Finished goods124,698  108,329  
Inventoried costs related to U.S. Government and other long-term contracts (1)
59,773  70,414  
Inventories, net of reserves469,237  432,978  
Less:  Progress payments applied(7,335) (8,143) 
Inventories, net$461,902  $424,835  
v3.20.2
GOODWILL (Table)
6 Months Ended
Jun. 30, 2020
Goodwill [Abstract]  
Schedule Of Goodwill
The changes in the carrying amount of goodwill for the six months ended June 30, 2020 are as follows:
(In thousands)Commercial/IndustrialDefensePowerConsolidated
December 31, 2019$431,082  $526,955  $208,643  $1,166,680  
Acquisitions29,233  14,629  —  43,862  
Adjustments—  (1,386) —  (1,386) 
Foreign currency translation adjustment(5,334) (5,942) (686) (11,962) 
June 30, 2020$454,981  $534,256  $207,957  $1,197,194  
v3.20.2
OTHER INTANGIBLE ASSETS, NET (Table)
6 Months Ended
Jun. 30, 2020
Intangible Assets, Net (Excluding Goodwill) [Abstract]  
Schedule Of Intangible Assets By Major Class
The following tables present the cumulative composition of the Corporation’s intangible assets:
June 30, 2020December 31, 2019
(In thousands)GrossAccumulated AmortizationNetGrossAccumulated AmortizationNet
Technology$262,861  $(145,060) $117,801  $257,676  $(140,390) $117,286  
Customer related intangibles459,417  (229,179) 230,238  434,492  (215,855) 218,637  
Programs (1)
144,000  (16,200) 127,800  144,000  (12,600) 131,400  
Other intangible assets45,902  (32,533) 13,369  43,729  (31,145) 12,584  
Total$912,180  $(422,972) $489,208  $879,897  $(399,990) $479,907  
v3.20.2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Table)
6 Months Ended
Jun. 30, 2020
Fair Value Disclosures [Abstract]  
Derivatives Not Designated as Hedging Instruments [Table Text Block]
Undesignated hedges

For the three and six months ended June 30, 2020 and 2019, the gains or (losses) recognized in income on forward exchange derivative contracts not designated for hedge accounting were as follows:

Three Months EndedSix Months Ended
(In thousands)June 30,June 30,
Derivatives not designated as hedging instrument2020201920202019
Forward exchange contracts:
General and administrative expenses$700  $(2,158) $(7,432) $1,431  
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]
June 30, 2020December 31, 2019
(In thousands)Carrying ValueEstimated Fair ValueCarrying ValueEstimated Fair Value
Revolving credit agreement, due 2024$75,000  $75,000  $—  $—  
3.84% Senior notes due 2021
100,000  102,137  100,000  102,079  
3.70% Senior notes due 2023
202,500  209,416  202,500  207,882  
3.85% Senior notes due 2025
90,000  95,028  90,000  93,838  
4.24% Senior notes due 2026
200,000  217,026  200,000  213,126  
4.05% Senior notes due 2028
67,500  72,655  67,500  71,260  
4.11% Senior notes due 2028
90,000  97,159  90,000  95,607  
Total debt825,000  868,421  750,000  783,792  
Debt issuance costs, net(534) (534) (594) (594) 
Unamortized interest rate swap proceeds10,336  10,336  11,233  11,233  
Total debt, net$834,802  $878,223  $760,639  $794,431  
v3.20.2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Table)
6 Months Ended
Jun. 30, 2020
Pension Plans Defined Benefit [Member]  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Schedule Of Defined Benefit Plans Disclosures
The components of net periodic pension cost for the three and six months ended June 30, 2020 and 2019 were as follows:

Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Service cost$6,611  $5,825  $13,222  $11,651  
Interest cost6,058  7,371  12,116  14,743  
Expected return on plan assets(16,896) (14,882) (33,792) (29,766) 
Amortization of prior service cost(71) (70) (142) (141) 
Amortization of unrecognized actuarial loss5,750  2,592  11,499  5,184  
Net periodic pension cost$1,452  $836  $2,903  $1,671  
v3.20.2
EARNINGS PER SHARE (Table)
6 Months Ended
Jun. 30, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share Reconciliation A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
 
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Basic weighted-average shares outstanding41,629  42,758  42,092  42,776  
Dilutive effect of stock options and deferred stock compensation226  266  270  262  
Diluted weighted-average shares outstanding41,855  43,024  42,362  43,038  
v3.20.2
SEGMENT INFORMATION (Table)
6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
Schedule Of Segment Reporting Information By Segment
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Net sales
Commercial/Industrial$213,814  $293,149  $478,314  $563,309  
Defense170,025  158,629  336,176  292,538  
Power166,684  188,419  337,688  363,454  
Less: Intersegment revenues(476) (1,201) (900) (1,991) 
Total consolidated$550,047  $638,996  $1,151,278  $1,217,310  
Operating income (expense)
Commercial/Industrial$14,366  $51,376  $49,353  $86,581  
Defense27,872  32,607  56,576  53,339  
Power21,259  31,983  41,881  57,364  
Corporate and eliminations (1)
(8,148) (10,281) (20,015) (19,554) 
Total consolidated$55,349  $105,685  $127,795  $177,730  

(1) Corporate and eliminations includes service costs related to pension and other postretirement benefits, certain environmental costs related to remediation at legacy sites, foreign currency transactional gains and losses, and certain other expenses.
Reconciliation of Operating Profit (Loss) from Segments to Consolidated
Three Months EndedSix Months Ended
June 30,June 30,
(In thousands)2020201920202019
Total operating income$55,349  $105,685  $127,795  $177,730  
Interest expense8,515  7,960  16,004  15,232  
Other income (expense), net(4,105) 5,871  1,427  11,349  
Earnings before income taxes$42,729  $103,596  $113,218  $173,847  
Reconciliation Of Assets From Segment To Consolidated
(In thousands)June 30, 2020December 31, 2019
Identifiable assets
Commercial/Industrial$1,385,177  $1,363,592  
Defense1,198,054  1,209,706  
Power885,353  885,727  
Corporate and Other174,087  305,236  
Total consolidated$3,642,671  $3,764,261  
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Table)
6 Months Ended
Jun. 30, 2020
Stockholders' Equity Note [Abstract]  
Schedule of Comprehensive Income (Loss)
The cumulative balance of each component of accumulated other comprehensive income (AOCI), net of tax, is as follows:
 
(In thousands)Foreign currency translation adjustments, netTotal pension and postretirement adjustments, netAccumulated other comprehensive income (loss)
December 31, 2018$(147,148) $(141,299) $(288,447) 
Other comprehensive income (loss) before reclassifications
18,447  (35,212) (16,765) 
Amounts reclassified from accumulated other comprehensive loss
—  6,195  6,195  
Net current period other comprehensive loss18,447  (29,017) (10,570) 
Cumulative effect from adoption of ASU 2018-02
$(1,318) $(24,939) $(26,257) 
December 31, 2019$(130,019) $(195,255) $(325,274) 
Other comprehensive income (loss) before reclassifications
(26,090) 316  (25,774) 
Amounts reclassified from accumulated other comprehensive income (loss)
—  8,367  8,367  
Net current period other comprehensive income (loss)(26,090) 8,683  (17,407) 
June 30, 2020$(156,109) $(186,572) $(342,681) 
Reclassification out of Accumulated Other Comprehensive Income
Details of amounts reclassified from accumulated other comprehensive income (loss) are below:
 
(In thousands)Amount reclassified from AOCIAffected line item in the statement where net earnings is presented
Defined benefit pension and other postretirement benefit plans
Amortization of prior service costs$470  Other income (expense), net
Amortization of actuarial losses(11,497) Other income (expense), net
(11,027) Earnings before income taxes
2,660  Provision for income taxes
Total reclassifications$(8,367) Net earnings
v3.20.2
RESTRUCTURING COSTS (Tables)
6 Months Ended
Jun. 30, 2020
Restructuring and Related Activities [Abstract]  
Restructuring and Related Costs The following tables summarize the respective accrual balances related to these restructuring activities:
In thousandsRestructuring Accrual as of December 31, 2019ProvisionCash PaymentsRestructuring Accrual as of June 30, 2020
Commercial/Industrial
Severance$—  $4,319  $(1,083) $3,236  
Facility closure and other exit costs—  1,102  (1,102) —  
Total Commercial/Industrial$—  $5,421  $(2,185) $3,236  
Defense
Severance$—  $2,431  $(1,896) $535  
Facility closure and other exit costs—  40  (40) —  
Total Defense$—  $2,471  $(1,936) $535  
Power
Severance$—  $2,553  $(464) $2,089  
Facility closure and other exit costs—  156  (156) —  
Total Power$—  $2,709  $(620) $2,089  
Consolidated
Severance$—  $9,303  $(3,443) $5,860  
Facility closure and other exit costs—  1,298  (1,298) —  
Total consolidated$—  $10,601  $(4,741) $5,860  
v3.20.2
REVENUE DISAGGREGATION OF REVENUE (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Disaggregation of Revenue [Line Items]        
Net sales $ 550,047 $ 638,996 $ 1,151,278 $ 1,217,310
Defense [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 294,275 280,673 584,452 511,305
Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 255,772 358,323 566,826 706,005
Defense Aerospace [Member] | Defense [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 109,305 104,426 211,133 183,213
Defense Ground [Member] | Defense [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 20,029 26,394 42,686 47,151
Naval [Member] | Defense [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 164,941 149,853 330,633 280,941
Commercial Aerospace [Member] | Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 71,084 108,000 171,765 211,222
Power Generation [Member] | Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Net sales 76,202 93,171 160,550 189,652
General Industrial [Member] | Commercial [Member]        
Disaggregation of Revenue [Line Items]        
Net sales $ 108,486 $ 157,152 $ 234,511 $ 305,131
Transferred over Time [Member]        
Disaggregation of Revenue [Line Items]        
Net Sales, Net, Percent 54.00% 48.00% 53.00% 48.00%
Transferred at Point in Time [Member]        
Disaggregation of Revenue [Line Items]        
Net Sales, Net, Percent 46.00% 52.00% 47.00% 52.00%
v3.20.2
REVENUE ADDITIONAL DETAILS (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Revenue from Contract with Customer [Abstract]        
Contract with Customer, Liability, Revenue Recognized $ 71 $ 54 $ 160 $ 133
Revenue, Remaining Performance Obligation, Amount $ 2,200   $ 2,200  
Revenue, Remaining Performance Obligation, Percentage 89.00%   89.00%  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Explanation     12-36 months  
v3.20.2
ACQUISITIONS (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Business Acquisition [Line Items]      
Goodwill $ 1,197,194   $ 1,166,680
Acquisition of businesses, net of cash acquired 82,003 $ 50,075  
2019 acquisitions [Member]      
Business Acquisition [Line Items]      
Accounts Receivable   2,300  
Inventory   322  
Property, Plant, and Equipment   648  
Other Current and Non-current Assets   479  
Intangible Assets, Other than Goodwill   26,000  
Right of Use Assets   1,393  
Current and Non-current Liabilities   (3,252)  
Net Tangible Assets Acquired (Liabilities) Assumed   27,890  
Goodwill   22,185  
Net Tangible and Intangible Assets   50,075  
Acquisition of businesses, net of cash acquired   50,075  
Business Combination, Consideration Transferred   50,075  
Goodwill, Expected Tax Deductible Amount   $ 22,185  
2020 acquisitions [Member]      
Business Acquisition [Line Items]      
Accounts Receivable 3,204    
Inventory 10,233    
Property, Plant, and Equipment 1,332    
Other Current and Non-current Assets 188    
Intangible Assets, Other than Goodwill 39,384    
Right of Use Assets 1,992    
Current and Non-current Liabilities (10,590)    
Net Tangible Assets Acquired (Liabilities) Assumed 45,743    
Goodwill 43,862    
Net Tangible and Intangible Assets 89,605    
Cash paid to date, net of cash acquired 82,003    
Payments To Acquire Business, Remaining To Be Paid 7,602    
Business Combination, Consideration Transferred 89,605    
Goodwill, Expected Tax Deductible Amount $ 38,469    
v3.20.2
ACQUISITIONS Narrative (Details)
$ in Thousands
6 Months Ended
Apr. 20, 2020
Feb. 26, 2020
Mar. 15, 2019
Jun. 30, 2020
USD ($)
NumberAcquisitions
Jun. 30, 2019
USD ($)
NumberAcquisitions
Business Acquisition [Line Items]          
Number of Businesses Acquired | NumberAcquisitions       2 1
Revenue of Acquiree since Acquisition Date, Actual       $ 7,000 $ 4,000
Earnings or Loss of Acquiree since Acquisition Date, Actual       (1,000) (1,000)
Acquisition of businesses, net of cash acquired       82,003 50,075
2019 acquisitions [Member]          
Business Acquisition [Line Items]          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net         50,075
Acquisition of businesses, net of cash acquired         50,075
Defense [Member] | Tactical Communications Group (TCG) [Member]          
Business Acquisition [Line Items]          
Effective Date of Acquisition     Mar. 15, 2019    
Acquisition of businesses, net of cash acquired         $ 50,000
Defense [Member] | Integrated Air Defense System (IADS) [Member]          
Business Acquisition [Line Items]          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net       29,000  
Effective Date of Acquisition Apr. 20, 2020        
Commercial Industrial [Member] | Dyna-Flo Valve Services Ltd. (Dyna-Flo) [Member]          
Business Acquisition [Line Items]          
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net       $ 60,000  
Effective Date of Acquisition   Feb. 26, 2020      
v3.20.2
RECEIVABLES (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Billed receivables:    
Trade and other receivables $ 361,749 $ 418,968
Less: Allowance for doubtful accounts (11,066) (8,733)
Net billed receivables 350,683 410,235
Unbilled receivables:    
Recoverable costs and estimated earnings not billed 257,185 231,067
Less: Progress payments applied (9,528) (9,108)
Net unbilled receivables 247,657 221,959
Receivables, net $ 598,340 $ 632,194
v3.20.2
INVENTORIES (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Inventory, Net [Abstract]    
Inventory, Raw Materials, Net of Reserves $ 177,200 $ 153,876
Inventory, Work in Process, Net of Reserves 107,566 100,359
Inventory, Finished Goods, Net of Reserves 124,698 108,329
Inventory For Long-term Contracts Or Programs, Net Of Reserves 59,773 70,414
Inventories, Net of Reserves 469,237 432,978
Less:  Progress payments applied (7,335) (8,143)
Inventories, net $ 461,902 $ 424,835
v3.20.2
INVENTORIES (Narrative) (Detail) - USD ($)
$ in Millions
Jun. 30, 2020
Dec. 31, 2019
Inventory, Net [Abstract]    
Other inventory, capitalized costs $ 32.4 $ 39.1
Other Inventory Capitalized Costs Not Supported By Existing Firm Orders $ 16.5 $ 23.7
v3.20.2
GOODWILL (Detail)
$ in Thousands
6 Months Ended
Jun. 30, 2020
USD ($)
Goodwill [Roll Forward]  
December 31, 2019 $ 1,166,680
Goodwill, Acquired During Period 43,862
Goodwill, Other Increase (Decrease) (1,386)
Foreign currency translation adjustment (11,962)
June 30, 2020 1,197,194
Commercial Industrial [Member]  
Goodwill [Roll Forward]  
December 31, 2019 431,082
Goodwill, Acquired During Period 29,233
Foreign currency translation adjustment (5,334)
June 30, 2020 454,981
Defense [Member]  
Goodwill [Roll Forward]  
December 31, 2019 526,955
Goodwill, Acquired During Period 14,629
Goodwill, Other Increase (Decrease) (1,386)
Foreign currency translation adjustment (5,942)
June 30, 2020 534,256
Power [Member]  
Goodwill [Roll Forward]  
December 31, 2019 208,643
Foreign currency translation adjustment (686)
June 30, 2020 $ 207,957
v3.20.2
OTHER INTANGIBLE ASSETS, NET (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]    
Gross $ 912,180 $ 879,897
Accumulated Amortization (422,972) (399,990)
Net 489,208 479,907
Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross 262,861 257,676
Accumulated Amortization (145,060) (140,390)
Net 117,801 117,286
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross 459,417 434,492
Accumulated Amortization (229,179) (215,855)
Net 230,238 218,637
Contract and Program Intangible Assets [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross 144,000 144,000
Accumulated Amortization (16,200) (12,600)
Net 127,800 131,400
Other Intangible Assets [Member]    
Finite Lived Intangible Assets [Line Items]    
Gross 45,902 43,729
Accumulated Amortization (32,533) (31,145)
Net $ 13,369 $ 12,584
v3.20.2
OTHER INTANGIBLE ASSETS, NET (Narrative) (Detail) - USD ($)
$ in Millions
6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Finite Lived Intangible Assets [Line Items]    
Finite-lived Intangible Assets Acquired $ 39.4  
Amortization expense 28.7 $ 22.6
Future amortization expense in remainder of fiscal year 58.0  
Future amortization expense in year two 48.0  
Future amortization expense in year three 45.0  
Future amortization expense in year four 41.0  
Future amortization expense in year five 38.0  
Technology [Member]    
Finite Lived Intangible Assets [Line Items]    
Finite-lived Intangible Assets Acquired $ 8.1  
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life 15 years  
Customer Relationships [Member]    
Finite Lived Intangible Assets [Line Items]    
Finite-lived Intangible Assets Acquired $ 28.9  
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life 19 years 4 months 24 days  
Other Intangible Assets [Member]    
Finite Lived Intangible Assets [Line Items]    
Finite-lived Intangible Assets Acquired $ 2.4  
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life 7 years 6 months  
v3.20.2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Income Loss) (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
General and Administrative Expense [Member]        
Derivative Instruments and Hedging Activities Disclosures [Line Items]        
Gain (Loss) on Foreign Currency Derivative Instruments Not Designated as Hedging Instruments $ 700 $ (2,158) $ (7,432) $ 1,431
v3.20.2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Debt) (Detail) - USD ($)
$ in Thousands
Jun. 30, 2020
Dec. 31, 2019
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 834,802 $ 760,639
Estimated Fair Value 878,223 794,431
Long-term Debt, Gross 825,000 750,000
Debt Issuance Costs, Net (534) (594)
Deferred Gain (Loss) on Discontinuation of Interest Rate Fair Value Hedge 10,336 11,233
Revolving Credit Facility [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value 75,000  
Estimated Fair Value 75,000  
3.84% Senior notes due 2021 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value 100,000 100,000
Estimated Fair Value $ 102,137 102,079
Debt Instrument, Interest Rate, Stated Percentage 3.84%  
3.70% Senior notes due 2023 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 202,500 202,500
Estimated Fair Value $ 209,416 207,882
Debt Instrument, Interest Rate, Stated Percentage 3.70%  
3.85% Senior notes due 2025 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 90,000 90,000
Estimated Fair Value $ 95,028 93,838
Debt Instrument, Interest Rate, Stated Percentage 3.85%  
4.24% Senior notes due 2026 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 200,000 200,000
Estimated Fair Value $ 217,026 213,126
Debt Instrument, Interest Rate, Stated Percentage 4.24%  
4.05% Senior notes due 2028 [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 67,500 67,500
Estimated Fair Value $ 72,655 71,260
Debt Instrument, Interest Rate, Stated Percentage 4.05%  
4.11% Senior Notes [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Carrying Value $ 90,000 90,000
Estimated Fair Value $ 97,159 95,607
Debt Instrument, Interest Rate, Stated Percentage 4.11%  
Long-term Debt, gross [Member]    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Estimated Fair Value $ 868,421 $ 783,792
v3.20.2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Detail) - Pension Plans Defined Benefit [Member] - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Defined Benefit Plan Disclosure [Line Items]        
Service cost $ 6,611 $ 5,825 $ 13,222 $ 11,651
Interest cost 6,058 7,371 12,116 14,743
Expected return on plan assets (16,896) (14,882) (33,792) (29,766)
Amortization of prior service cost (71) (70) (142) (141)
Amortization of unrecognized actuarial loss 5,750 2,592 11,499 5,184
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Total $ 1,452 $ 836 2,903 $ 1,671
Defined Benefit Plan, Plan Assets, Contributions by Employer     $ 150,000  
v3.20.2
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Additional) (Detail) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2020
Defined Contribution Plan Disclosure [Line Items]          
Defined Contribution Plan, Employer Contribution, Percentage, Maximum     7.00%    
Defined Contribution Plan, Cost $ 4.3 $ 4.2 $ 10.3 $ 9.6  
Defined Contribution Plan, Employer Discretionary Contribution Amount     $ 14.0    
Forecast [Member]          
Defined Contribution Plan Disclosure [Line Items]          
Defined Contribution Plan, Employer Discretionary Contribution Amount         $ 18.3
v3.20.2
EARNINGS PER SHARE (Detail) - shares
shares in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Earnings Per Share Reconciliation [Abstract]        
Basic weighted-average shares outstanding (shares) 41,629 42,758 42,092 42,776
Dilutive effect of stock options and deferred stock compensation (shares) 226 266 270 262
Diluted weighted-average shares outstanding (shares) 41,855 43,024 42,362 43,038
v3.20.2
EARNINGS PER SHARE EARNINGS PER SHARE (Anti-dilutive) (Details) - shares
shares in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 0 0 0 0
v3.20.2
SEGMENT INFORMATION (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Segment Reporting Information [Line Items]          
Net sales $ 550,047 $ 638,996 $ 1,151,278 $ 1,217,310  
Operating income (expense) 55,349 105,685 127,795 177,730  
Identifiable assets 3,642,671   3,642,671   $ 3,764,261
Commercial Industrial [Member]          
Segment Reporting Information [Line Items]          
Net sales 213,814 293,149 478,314 563,309  
Operating income (expense) 14,366 51,376 49,353 86,581  
Identifiable assets 1,385,177   1,385,177   1,363,592
Defense [Member]          
Segment Reporting Information [Line Items]          
Net sales 170,025 158,629 336,176 292,538  
Operating income (expense) 27,872 32,607 56,576 53,339  
Identifiable assets 1,198,054   1,198,054   1,209,706
Power [Member]          
Segment Reporting Information [Line Items]          
Net sales 166,684 188,419 337,688 363,454  
Operating income (expense) 21,259 31,983 41,881 57,364  
Identifiable assets 885,353   885,353   885,727
Corporate, Non-Segment [Member]          
Segment Reporting Information [Line Items]          
Operating income (expense) (8,148) (10,281) (20,015) (19,554)  
Identifiable assets 174,087   174,087   $ 305,236
Intersegment Eliminations [Member]          
Segment Reporting Information [Line Items]          
Net sales $ (476) $ (1,201) $ (900) $ (1,991)  
v3.20.2
SEGMENT INFORMATION (Reconciliation) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Segment Reporting [Abstract]        
Total operating income $ 55,349 $ 105,685 $ 127,795 $ 177,730
Interest expense (8,515) (7,960) (16,004) (15,232)
Other income (expense), net (4,105) 5,871 1,427 11,349
Earnings before income taxes $ 42,729 $ 103,596 $ 113,218 $ 173,847
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended 12 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Dec. 31, 2019
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     $ (325,274) $ (288,447) $ (288,447)
Other comprehensive income (loss) before reclassifications     (25,774)   (16,765)
Amounts reclassified from accumulated other comprehensive loss     8,367   6,195
Other comprehensive income (loss), net of tax $ 28,187 $ 2,289 (17,407) 12,214 (10,570)
Ending balance (342,681)   (342,681)   (325,274)
Foreign Currency Translation Adjustments, Net [Member]          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     (130,019) (147,148) (147,148)
Other comprehensive income (loss) before reclassifications     (26,090)   18,447
Amounts reclassified from accumulated other comprehensive loss     0   0
Other comprehensive income (loss), net of tax     (26,090)   18,447
Ending balance (156,109)   (156,109)   (130,019)
Total Pension and Postretirment Adjustments, Net [Member]          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     (195,255) $ (141,299) (141,299)
Other comprehensive income (loss) before reclassifications     316   (35,212)
Amounts reclassified from accumulated other comprehensive loss     8,367   6,195
Other comprehensive income (loss), net of tax     8,683   (29,017)
Ending balance $ (186,572)   (186,572)   (195,255)
Accounting Standards Update 2018-02 [Member]          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     (26,257)    
Ending balance         (26,257)
Accounting Standards Update 2018-02 [Member] | Foreign Currency Translation Adjustments, Net [Member]          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     (1,318)    
Ending balance         (1,318)
Accounting Standards Update 2018-02 [Member] | Total Pension and Postretirment Adjustments, Net [Member]          
Accumulated Other Comprehensive Income (Loss) [Roll Forward]          
Beginning balance     $ (24,939)    
Ending balance         $ (24,939)
v3.20.2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Reclass) (Detail) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2019
Jun. 30, 2020
Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Earnings from continuing operations before income taxes $ 42,729 $ 103,596 $ 113,218 $ 173,847
Reclassification out of Accumulated Other Comprehensive Income [Member] | Total Pension and Postretirment Adjustments, Net [Member]        
Accumulated Other Comprehensive Income (Loss) [Line Items]        
Amortization of prior service costs     470  
Amortization of actuarial losses     (11,497)  
Earnings from continuing operations before income taxes     (11,027)  
Provision for income taxes     2,660  
Net earnings     $ (8,367)  
v3.20.2
CONTINGENCIES AND COMMITMENTS (Detail) - USD ($)
Oct. 10, 2013
Jun. 30, 2020
Dec. 31, 2019
Standby Letters Of Credit [Member]      
Loss Contingencies [Line Items]      
Letters of credit, outstanding   $ 21,800,000 $ 32,600,000
FinancialStandbyLetterOfCreditMember      
Loss Contingencies [Line Items]      
Letters of credit, outstanding   6,400,000 $ 10,800,000
Failure to Meet Contractual Obligations [Member]      
Loss Contingencies [Line Items]      
Damages sought $ 25,000,000    
Surety Bond [Member]      
Loss Contingencies [Line Items]      
Surety Bond Outstanding   45,600,000  
Minimum [Member]      
Loss Contingencies [Line Items]      
Range of possible loss   0  
Maximum [Member]      
Loss Contingencies [Line Items]      
Range of possible loss   55,500,000  
AP1000 US [Member] | Minimum [Member]      
Loss Contingencies [Line Items]      
Range of possible loss   0  
AP1000 US [Member] | Maximum [Member]      
Loss Contingencies [Line Items]      
Range of possible loss   $ 31,000,000  
v3.20.2
RESTRUCTURING COSTS - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended 6 Months Ended
Jun. 30, 2020
Jun. 30, 2020
Restructuring Cost and Reserve [Line Items]    
Restructuring Costs $ 15 $ 17
Restructuring and Related Cost, Expected Cost Through End Of Current Year   35
Effect on Future Earnings, Amount   40
Write-down and impairments [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Costs $ 6 $ 7
v3.20.2
RESTRUCTURING COSTS - Schedule of Restructuring Accrual (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve $ 5,860 $ 0
Increase (Decrease) in Restructuring Reserve 10,601  
Payments for Restructuring 4,741  
Commercial Industrial [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 3,236 0
Increase (Decrease) in Restructuring Reserve 5,421  
Payments for Restructuring 2,185  
Defense [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 535 0
Increase (Decrease) in Restructuring Reserve 2,471  
Payments for Restructuring 1,936  
Power [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 2,089 0
Increase (Decrease) in Restructuring Reserve 2,709  
Payments for Restructuring 620  
Employee Severance [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 5,860 0
Increase (Decrease) in Restructuring Reserve 9,303  
Payments for Restructuring 3,443  
Employee Severance [Member] | Commercial Industrial [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 3,236 0
Increase (Decrease) in Restructuring Reserve 4,319  
Payments for Restructuring 1,083  
Employee Severance [Member] | Defense [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 535 0
Increase (Decrease) in Restructuring Reserve 2,431  
Payments for Restructuring 1,896  
Employee Severance [Member] | Power [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 2,089 0
Increase (Decrease) in Restructuring Reserve 2,553  
Payments for Restructuring 464  
Facility Closing [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 0 0
Increase (Decrease) in Restructuring Reserve 1,298  
Payments for Restructuring 1,298  
Facility Closing [Member] | Commercial Industrial [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 0 0
Increase (Decrease) in Restructuring Reserve 1,102  
Payments for Restructuring 1,102  
Facility Closing [Member] | Defense [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 0 0
Increase (Decrease) in Restructuring Reserve 40  
Payments for Restructuring 40  
Facility Closing [Member] | Power [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring Reserve 0 $ 0
Increase (Decrease) in Restructuring Reserve 156  
Payments for Restructuring $ 156