Curtiss-Wright
Annual Report 2010

Plain-text annual report

Uniquely Positioned for Growth 2010 BUSINESS OVERVIEW 1 2010 BUSINESS OVERVIEW 2010 BUSINESS OVERVIEW 2 2010 BUSINESS OVERVIEW Curtiss-Wright continually invests in the advanced technologies, physical facilities, equipment and talent needed to maintain a global leadership position in our core defense, energy and commercial/industrial markets. We are developing technologies that enhance our ability to deliver future generations of systems and products for high-performance platforms in our markets. We are expanding our capacity to meet the breadth of offerings and rigorous quality standards our customers require. We are broadening our global footprint to stay aligned with our customers, and our leadership and management development initiatives ensure our people have the skills and expertise to be successful. This is why Curtiss-Wright is uniquely positioned for growth. Table of Contents 2 4 10 14 16 20 21 22 23 24 Letter to Shareholders Technology Advancement Facility Enhancement Talent Development Segment Information Historical Financial Performance Auditor’s Opinion Consolidated Statements of Earnings Consolidated Balance Sheets Consolidated Statements of Cash Flows 2010 BUSINESS OVERVIEW 1 Power Generation Curtiss-Wright plays a vital role in the nuclear energy market by supplying critical equipment to support both existing and new nuclear power plants worldwide. Our reactor coolant pumps for the AP1000TM Generation III+ nuclear power plants are the largest, most advanced canned motor pumps ever produced. Aerospace Defense Through our embedded computing technology, we are at the forefront of Intelligence, Surveillance and Reconnaissance platforms such as the Global Hawk unmanned aerial vehicle, for which our integrated sensor and mission management systems essentially serve as the operational brain of the aircraft. Oil and Gas For oil and gas processing, we improve the reliability, effi ciency and safety of catalytic cracking processes with our large reactors and high-temperature slide valves and for delayed coking processes with our coke drum unheading devices, actuator systems and process control technologies. Naval Defense An advanced arresting gear system will be providing enhanced safety, reduced maintenance and improved fl exibility to the U.S. Navy’s carrier fl eet in the years ahead. Curtiss-Wright applied its expertise in electric motors to develop and supply a key component of this system. Commercial Aerospace Curtiss-Wright improves the fatigue life of turbine engine components and forms the complex aerodynamic shapes of commercial aircraft wing skins through our shot peening and advanced laser peening services. 2 2010 BUSINESS OVERVIEW Dear Shareholders: 2010 served as a year of transition for Curtiss-Wright. As a company that was founded on innovation, advanced technologies and high-performance engineering, we were faced with the daunting task of overcoming one of the most challenging economic periods in history. With a management team intensely focused on driving execution and controlling costs, we ended 2010 with strong profi tability and a solid base upon which we can continue to grow our business. We also continued to build our company through acquisitions, strategic investments, facility expansions and consolidations, all of which, we believe, strengthened our overall competitiveness. It is our continued drive that enabled us to weather the downturn, and we have emerged a stronger company. We are truly a global company, with international sales now representing 30% of our total business, and our diversifi cation remains a key component of our long-term success. When combined with our focus on innovation and advanced technologies, the expansion of our global footprint and our continuous leadership and management development initiatives, it is clear why we believe we are uniquely positioned for growth. in our general industrial, naval and aerospace defense and commercial aerospace markets, all of which produced double-digit increases over the prior year. Despite the increased demand, we did encounter a few challenges, including large defense program cancellations that negatively impacted our defense businesses and the continued slowness in the oil and gas market. Improving operating effi ciency is a continual priority at Curtiss-Wright. We succeeded in growing our operating margin slightly to 9.5% with strong contributions from each of our three segments, despite the signifi cant impact that foreign exchange had on our operating results. Although our margins are not yet back to our peak levels from a few years ago, our ongoing cost reduction and restructuring initiatives, many of which began in 2009, have led to a leaner, more effi cient company, and we intend to continue to take strides to improve our profi tability going forward. 2010 Performance We concluded 2010 with strong profi tability across our segments, as our profi t once again grew faster than sales. Net earnings of $107 million, or $2.30 per fully diluted share, refl ect a 12% increase from the prior year. We also generated signifi cant free cash fl ow of $119 million. Net sales of $1.89 billion represented a 5% increase from the prior year, primarily driven by a solid rebound in our commercial markets, which are more sensitive to economic conditions. Our sales were led by strong gains We fi nished the year with a solid backlog of nearly $1.7 billion, driven by an 11% increase in new orders, setting the stage for future sales and allowing us to stay on the path towards continuous, long-term growth. Martin R. Benante, Chairman and Chief Executive Offi cer Focus on our Technology, Facilities and Talent Development There is always the temptation in diffi cult economic times to reduce spending on innovation, capacity and people, a course of action that all too frequently can leave a company unprepared to participate effectively when conditions improve. Our strong fi nancial position and the effi ciency of our product-development programs enabled us to preserve our tradition of innovation despite the tough economy. The heart of our technological innovation is knowing what our customers want today and will require tomorrow, an understanding grounded in our history of long-standing relationships with our global customers. We have a long and successful history of putting together in timely fashion the right components for future success through new development, acquisition or partnership. For example, we are building a $36 million, state-of-the-art manufacturing facility to produce large, thick-walled vessels, such as coke drums, fractionators, fl uid catalytic cracking units and hydrotreaters, to serve our future growth in the refi ning, chemical and nuclear power industries. We also made a pair of small but important acquisitions within our Motion Control business that signifi cantly enhance our capabilities in Net Sales Dollars in millions 1,830 1,810 1,893 1,592 1,282 $2,000 $1,500 $1,000 $500 0 Operating Income Dollars in millions $200 197 179 180 169 $150 141 $100 $50 0 2010 BUSINESS OVERVIEW 3 Net Income Dollars in millions 109 104 107 95 81 $120 $90 $60 $30 0 ’06 ’07 ’08 ’09 ’10 ’06 ’07 ’08 ’09 ’10 ’06 ’07 ’08 ’09 ’10 advanced defense electronics and improve the company’s portfolio of products serving Intelligence, Surveillance and Reconnaissance (ISR) applications. We accelerated our talent-development initiatives last year through leadership- development programs aimed at promoting a common culture and providing the necessary tools and skills to align with and execute the company’s vision and strategies. Our programs recognize that talent and imagination are crucial to success. Focus on our Strategic Markets In defense, we experienced 3% growth, led by sales to the U.S. Navy as it began expansion of its submarine fl eet and production on a new aircraft carrier. We also benefi ted from higher demand in aerospace defense for our embedded computing and sensors and controls products, principally for ISR applications on the Global Hawk and other unmanned aerial vehicles as well as various helicopter programs. Our strategic diversifi cation and strong positions on key defense programs enabled us to offset some of the expected weakness related to the termination of the Future Combat Systems and F-22 programs, signifi cantly lower Bradley sales due to reduced modernization efforts and the completion of the DDG1000 program. Overall, we were relatively pleased with our performance in 2010, as we overcame numerous headwinds facing the defense industry. In our commercial markets, our 6% growth stemmed from an economy that continued to show signs of improvement. The largest benefi ciary of this turnaround was our general industrial market, which generated a solid increase of 18%, aided by strong sales to the automotive industry. Commercial aerospace was another bright spot in 2010, as we benefi tted from increased orders from Boeing and Airbus. Our energy markets remained mixed, as strong sales related to maintenance and upgrades on various projects throughout our power generation and oil and gas markets were mainly offset by lower capital spending worldwide on larger projects. Diversifi cation is paramount to our overall success and to our ability to overcome several end-market pressures. We remain well positioned within our core markets and well capitalized to capture future opportunities. We continue to strategically invest in both our technologies and select acquisitions in order to fortify our business portfolio. We also maintained our annual dividend, refl ecting the Board’s confi dence in our ability to continue to generate earnings growth and provide a consistent distribution of value to our shareholders. In Recognition It is with sincere best wishes that we announce the retirement of our colleague and close friend William B. Mitchell from our Board of Directors. Bill has been an integral member of our Board for 15 years, providing a wealth of insight and vital counsel, as we guided the company through diversifi cation and growth. For the past 11 years, he served as Chair of the Finance Committee and a member of the Executive Compensation Committee. We also say farewell to Carl G. Miller, who departs from our Board of Directors after seven years of valuable counsel. During his tenure, Carl served as a dedicated member of our Audit and Finance Committees. I personally would like to thank Bill and Carl for their dedication and service to Curtiss-Wright and wish them well in their future endeavors. As we look to 2011, I remain confi dent that Curtiss-Wright is uniquely positioned for growth in all of our end markets and committed to enhancing shareholder value. Martin R. Benante Chairman and Chief Executive Offi cer Uniquely Positioned for Growth through 4 2010 BUSINESS OVERVIEW Technology Advancement Curtiss-Wright is renowned for its innovation and advanced technologies. Always adaptive, we focus the expertise of our Flow Control, Motion Control and Metal Treatment businesses on the unique demands the 21st century presents to our customers. 2010 BUSINESS OVERVIEW 5 We take a comprehensive approach to technology development, ever mindful that new technology widens our opportunities and expands our potential for growth. Our close, long-standing relationships with customers across industries and geographies provide insight into their current and future needs. Moreover, we also seek to leverage our success by broadening our footprint within key growth markets and continually look to apply our technology to adjacent markets. The richness of Curtiss-Wright’s technology portfolio can be seen through the benefi ts it brings to key parts of our customers’ most vital programs. Our defense products are critical components in a wide variety of air, sea and ground platforms in new development programs, those currently in production and for upgrades and replacement orders. Curtiss-Wright supplies a wide variety of advanced products on numerous platforms that support the ISR functions of collection, communication, processing and presentation of information of interest that supports military users. Examples of our involvement in ISR systems include unmanned aerial vehicles (Global Hawk), dedicated ISR manned airborne platforms (P-8A Poseidon Multi- mission Maritime Aircraft) and tactical fi ghter aircraft (F-35 Joint Strike Fighter). On manned aircraft, Curtiss-Wright provides critical fl ight-control actuation systems and stealth-capable weapons bay door systems. Our video displays, recorders and video/radar converters enable observers and pilots to select, view and record the images they need simply and with maximum fi delity. Military, police, search and rescue, border protection, coast guard and customs personnel use our video systems on helicopters in a variety of countries. Recovery of information recorded by our Crash Survivable Memory Unit assists air accident investigators in determining the events leading up to an incident. To protect the solid-state memory that performs this critical function, Curtiss-Wright designs each recorder to withstand the harshest operating conditions, whether that means withstanding a 5,000-pound crushing force, enduring one hour engulfed by a 2,000ºF fl ame or being submerged in 20,000 feet of water. For more than 50 years, Curtiss-Wright has supplied critical components and systems to the U.S. Navy’s nuclear-powered ships. Our pumps, valves, generators, motors and control systems are aboard nuclear-powered submarines and aircraft carriers throughout the Navy’s fl eet. We have earned a reputation that will enable us to play a critical role as the Navy begins work on a planned class of 12 next-generation Ohio-class ballistic missile submarines to replace 14 mature submarines. The Broad Area Maritime Surveillance Unmanned Aircraft System (BAMS UAS) will provide the U.S. Navy with a persistent maritime Intelligence, Surveillance and Reconnaissance system to protect the fl eet and the capability to detect, track, classify and identify maritime and littoral targets. Curtiss-Wright supports this signifi cant defense platform by supplying the Advanced Mission Management System for the aircraft. 6 2010 BUSINESS OVERVIEW © S i k o r s k y A i r c r a f t C o r p o r a t i o n 2 0 1 1 . A l l r i g h t s r e s e r v e d . A recognized leader in the design, development, manufacture and integration of motion and fi re controls, Curtiss-Wright technology is widely represented in the most advanced military ground vehicle electronics platforms, from individual components to integrated subsystems. Our technologies play a prominent role in such key platforms as the M1A2 Abrams main battle tank, the Bradley Fighting Vehicle, the Stryker Mobile Gun System, the Hoefyster modular fi ghting vehicle and the Pizarro fi ghting vehicle. We are actively advancing electronic systems and motion control technologies for tomorrow’s sophisticated defense platforms. From intelligent power controllers and vehicle power distribution to network-centric, open-system electronics architectures that reduce size, weight and power consumption, Curtiss-Wright is poised to offer solutions for the evolving needs in the next generation of modern ground combat vehicles. To address the threat to service personnel posed by buried, unexploded ordnance, U.S., European and Southeast Asian military customers are using our advanced Ground Penetrating Radar (GPR) technology. GPR uses microwave radar pulses to generate high- resolution, three-dimensional images of buried objects, ideal for the identifi cation of unexploded ordnance as well as variations in subsurface structures. (Above Left) Our Skyquest video management system (VMS) maximizes the effectiveness of airborne ISR missions by enabling multiple operators to view, control and record live video and mapping information in helicopters. Our VMS has been chosen by leading security forces and militaries the world over, including the U.S. Army for its new Lakota light utility helicopter fl eet. (Above) The U.S. Marine Corps will deploy the Sikorsky CH-53K from amphibious platforms to transport personnel and equipment and carry heavy external cargo loads. Curtiss-Wright transducers will be used in the fl y-by-wire systems that control the helicopter’s main and tail rotors. Our data concentrator units will receive and provide various discrete, digital and analog inputs for monitoring, processing data and controlling various subsystem components. Our blade fold technology will process the required information to execute the folding or spreading of the main rotor blades, key to the CH-53K’s compatibility for effective shipboard deployment. (Right) Curtiss-Wright’s Ground Penetrating Radar can detect unexploded ordnance and variations in subsurface structures. When equipped with a realtime view feature, operators can view data within milliseconds of the initial GPR capture. (Below) This wound stator core is an integral component for one of the largest motors manufactured by Curtiss-Wright. It will be part of the AP1000TM reactor coolant pump (RCP), one of the largest canned motor pumps manufactured in the world. These RCPs are highly reliable, low- maintenance, hermetically sealed motor pumps that circulate reactor coolant through the reactor core, loop piping and steam generators for the AP1000TM nuclear power plant design. 2010 BUSINESS OVERVIEW 7 Curtiss-Wright’s fl ow control expertise positions us well as industries and nations seek the most advanced technology with which to build or upgrade their critical energy infrastructure. Curtiss-Wright is the world’s premier designer and builder of reactor coolant pumps, supporting the future of nuclear power generation. With rising interest in non-fossil fuel energy sources, demand for upgrading existing and building new nuclear plants is rising around the globe. In support of the new nuclear plant revival, we are on schedule to deliver the world’s largest canned motor reactor coolant pumps for use in the Westinghouse AP1000TM nuclear power plants, under construction in China, by the end of 2011. A key issue for operators of nuclear facilities is managing their growing stockpile of spent nuclear fuel. We are a leader in spent fuel storage 8 2010 BUSINESS OVERVIEW technology, supplying products and services that extend the safe and useful life of spent fuel pools and addressing regulatory requirements related to the safe, effi cient operation of nuclear power plants. Curtiss-Wright’s product portfolio for the oil and gas market has evolved from that of a customized component supplier to an integrated system provider — important to both new refi neries in emerging markets and mature facilities. The success of our coke-drum unheading system for the delayed coking process has stimulated demand for our other related technologies, including isolation valves, cutting tools to remove coke and control and automation systems that manage coker operations. Our integrated solutions optimize operations and enhance safety for our customers. Advances in equipment performance bring with them greater demands on component materials, and nowhere is this more (Left) Curtiss-Wright is a leading authority and supplier of critical components needed to maintain the effi cient, safe operation of nuclear power plants around the world. We provide unique spent nuclear fuel management products and services, including a patented neutron-absorbing product, the NETCO-SNAP-IN® insert, that extends the useful life of fuel storage racks submerged in spent fuel pools. (Below) With an engineering legacy that originated with Glenn Curtiss and the Wright brothers, Curtiss-Wright technology is found on the latest generation of commercial airliners. In collaboration with some of the world’s leading aerospace partners, Curtiss-Wright is supporting Boeing’s 787 “Dreamliner” — the world’s fi rst major aircraft to use composite materials for a majority of its structure — by supplying the large cargo door mechanisms, aft strut fairing module, linear and rotary position sensors for primary and secondary fl ight controls, solenoids and components for nose wheel steering control and the environmental control system. For the Airbus A380 — the world’s largest commercial aircraft — Curtiss-Wright shot peens structural components, including the wing skins, ribs, spars and stringers. We also supply the cabin pressure relief valve actuators, linear position sensors and solenoids. 2010 BUSINESS OVERVIEW 9 apparent than with aerospace technology. By capitalizing on our metal treatment expertise, original equipment manufacturers can signifi cantly improve the stress limits and fatigue life of critical airframe structures and turbine engine components. Advancements in our laser peening technology will enable us to establish a mobile laser peening facility in Southern California in 2011 to provide services directly on the F-22 Raptor aircraft structure. Similar mobile laser peening units will be deployed in Singapore and elsewhere in the Far East to support that region’s growing turbine engine manufacturing infrastructure. Technological advancements require more than just operational excellence. We have continued to make major investments in new technologies and products, and we have simultaneously deepened and expanded the reach of our core competencies. (Above) Currently undergoing in-store testing with an international home improvement center retail chain, the MicroBlend Automated Paint Machine™ system is a revolutionary approach to the paint sales process. The system ensures greater process repeatability and more effi cient dispensing of paint for retailers, while providing customers with superior color matching, greater color selection and faster service. Custom automated controls and software from our Benshaw business unit are integral to reducing the system’s setup time, improving process consistency and safeguarding accuracy. (Right) Parylene coatings applied by Curtiss-Wright are utilized by the medical device industry on coronary artery stents, rubber/silicone seals and wire forming mandrels used in the manufacture of catheters. The coating has unique end-use properties of lubricity, moisture impermeability, solvent resistance and biocompatibility. Parylene coatings are also used in electronic, oil and gas and general industrial applications. Uniquely Positioned for Growth through 10 2010 BUSINESS OVERVIEW Facility Enhancement Market leadership requires investment of capital in the construction of new facilities that are compatible with new technologies as well as expansion of existing operations to meet increased demand and to improve productivity. Curtiss-Wright’s new state-of-the-art manufacturing facility is strategically located to supply large vessels and valves for the global oil and gas, petrochemical, power, water, desalination and chemical industries. The Texas site spans 12 acres, is located near convenient barge transportation and includes a 118,000-square-foot manufacturing facility that will house some of the most modern machining and fabrication equipment available. The facility is capable of producing pressure vessels up to 38 feet in diameter inside the building, with unlimited size restraints in the lay-down yard. This expanded capacity will provide the fl exibility to expand into new products and markets, increase our competitiveness on large-scale refi nery projects and enhance our global market reach. 2010 BUSINESS OVERVIEW 11 Investment fuels both our adoption of the latest production technologies to maintain high effi ciencies and the opening of facilities in new geographic markets that are served more effi ciently on a local basis. Investment in expansion is a competitive advantage in growing and high-value markets. A new, state-of-the-art facility in Texas will be Curtiss-Wright’s manufacturing center of excellence for the construction of super vessels, thick-walled pressure vessels, reactors and hydrotreaters and for modular fabrication in support of the global oil and gas industry. This facility will increase our manufacturing capacity and reduce our costs, while improving our overall competitiveness and expanding our product offerings. The commitment to build this facility, which is scheduled to open in 2011, demonstrates the critical role that energy markets will play in our future growth. Curtiss-Wright supports the growth of manufacturing in rapidly developing economies by establishing local surface treatment capabilities. Our Metal Treatment facility in Jiangsu Province, China, serves the aerospace, automotive, medical and chemical industries in and around the industrial center in Shanghai with controlled shot peening services, as well as advanced lubrication and corrosion protection coatings technology. Our new surface treatment facility in Galway, Ireland, supports that country’s signifi cant medical device industry. This new facility offers parylene coatings technology, wherein thin polymeric coatings are applied in vacuum chamber environments. These biocompatible coatings provide moisture and electrical protection for medical as well as electronic devices. After originally adding this technology to our portfolio of services through an acquisition, we are migrating the parylene coating capability to other sites in the U.S. to capitalize on geographic market opportunities. A key part of success requires a strong commitment to developing capabilities in-country and building long-term relationships in target global markets. Along with a new sales offi ce in Shanghai, a new business center in Suzhou, China, supports our rapidly expanding Motion Control presence and activities in China and throughout the Far East. Our 23,000-square-foot Suzhou facility will signifi cantly enhance our ability to deliver locally manufactured products to industrial and aerospace customers and thereby strengthen our global competitiveness in the motion control market. Likewise, the Curtiss-Wright Flow Control segment is opening a sales offi ce in the China World Center in Beijing to facilitate better access to key customers in the commercial nuclear, oil and gas and petrochemical industries. 12 2010 BUSINESS OVERVIEW Our Flow Control segment is also consolidating the motor controls and drives operation in Shanghai into its existing facility in Tianjin, China. This strategic integration will better position the company for increased customer support and continued growth in China. The Flow Control operation in Tianjin earned ASME certifi cation for its spring-loaded and pilot-operated pressure relief valves, allowing valves manufactured, set and tested within China to be sold into any market requiring ASME certifi cation. In North America, Motion Control’s Embedded Computing division completed a signifi cant expansion at its Ottawa, Ontario, manufacturing facility, adding 30,000 square feet of space to accommodate an expansion of engineering and production capabilities. In response to unprecedented growth in the digital signal processing and high-density processing product lines, Embedded Computing also relocated its headquarters to a new (Right) Benshaw is a market leader in supplying critical motor control and protection solutions for leading OEMs and industrial customers. This business unit has reinforced our competitive position by integrating all facets of its U.S.-based manufacturing process — previously dispersed among fi ve different locations — into a single 183,000-square-foot facility. Benshaw now designs, develops, manufactures and delivers its advanced industrial motor controls and drives from one lean, state-of-the-art environment. (Below) In 2010, Curtiss-Wright opened a new dedicated coating facility in Galway, Ireland, to service the U.K. region’s medical device industry. The facility has the capability to apply parylene coatings in a clean room environment to a broad variety of medical device components. We now offer specialty parylene conformal coatings in fi ve North American and European facilities. 2010 BUSINESS OVERVIEW 13 (Above) The Metal Treatment facility in China successfully achieved Nadcap accreditations in 2010 for Surface Enhancement and Chemical Processing. These approvals demonstrate the facility’s ability to meet the demanding quality system and process control requirements of the international aerospace community. By combining shot peening and coating application processes in one plant, Curtiss-Wright’s Suzhou, China, facility provides its aerospace customers with a “one-stop shop” for surface treatment services. (Left) Our Integrated Sensing division is upgrading the CNC machining infrastructure at its Tempe, AZ facility to reduce costs through effi ciency improvements while increasing capabilities. This initiative, along with a lean and continuous improvement culture, will continue to enhance our manufacturing leadership for the aerospace market. 20,000-square-foot facility in Ashburn, VA that is strategically located closer to a number of key customers. Motion Control’s Electronic Systems division completed an expansion at its Littleton, MA facility to accommodate the integration of the Hybricon engineered electronic packaging group acquired in June 2010. To meet increasing demand from our commercial aerospace, defense and industrial customers, we expanded our Integrated Sensing division’s manufacturing facility in Nogales, Mexico, adding 26,000 square feet of space to the existing facility, which is ISO 9002 and AS9100 certifi ed. Our capital investments refl ect our history of adapting to changing demand by continually reshaping our facilities’ infrastructure in order to meet the critical current and future advanced needs of our global customers. 14 2010 BUSINESS OVERVIEW Uniquely Positioned for Growth through Talent Development Curtiss-Wright is accelerating its talent development through a variety of programs to ensure that the organization’s skills and knowledge keep pace with the continuing expansion of our businesses. 2010 BUSINESS OVERVIEW 15 Curtiss-Wright created an in-depth curriculum designed to accelerate leadership development and promote a common culture. The leadership development curriculum provides leaders at every level with new tools and skills to align with and execute the company’s vision and strategies. Since these programs began in 2007, more than 800 participants have attended one or more sessions. We also develop leadership competencies that tie to the company’s values and success profi les for every leadership role. A key component of this initiative is an Executive Leadership Development Program, in which over 100 high-potential employees have participated. The program provides insight into each individual’s leadership style by utilizing assessment tools in conjunction with personalized coaching. Other programs focus on enhancing our core capabilities and raising the performance of critical functions, such as project management, to the next level through the creation of professional development programs. To date, nearly 300 executives, line managers and project managers have attended one or more of the programs offered. Curtiss-Wright’s Technical Fellow Program aims to develop and retain in-house expertise to support current and future organizational objectives, and to better position the company to respond to future technical challenges. The program recognizes technical experts who are authorities in specifi c engineering fi elds that are of major importance to Curtiss-Wright. This program allows the company to leverage expertise more effectively while providing program participants the opportunity for high‐level career growth and development outside of the management stream. These individuals represent the top-tier of engineering excellence, matching industry benchmarks and standards. In addition, we tailor talent development programs to support the more localized nature of some of our operating facilities. Facility-based education and training programs focus on increasing productivity, energy effi ciency and safety. They incorporate use of visual management, lean manufacturing techniques and the development of more effi cient equipment designs to streamline part fl ow and decrease turn times. All activities support a culture of continuous productivity improvement, which is critical to maintaining a competitive advantage in quality, price and turn times. As exemplifi ed by legendary aviation pioneers Glenn Curtiss and the Wright brothers, engineering is based on knowledge, technical skill and imagination. In that tradition, Curtiss-Wright continues to take the actions needed to maintain and expand our employees’ capacity for professional excellence in the face of the world’s most critical business and engineering challenges. Our success depends on acute business knowledge, engineering innovation, refi ned technical skills and imagination. Curtiss-Wright is continually focused on maintaining and expanding our employees’ capacity for professional excellence through rigorous programs that nourish individual talent, expand team effectiveness, leverage experience and knowledge and enhance technical and management skills. 16 2010 BUSINESS OVERVIEW Segment Financial Information Year ended December 31, (In millions; unaudited) 2010 2009 Change Sales Flow Control Motion Control Metal Treatment Total Sales Operating Income Flow Control Motion Control Metal Treatment Total Segments Corporate and Other Total Operating Income Operating Margins Flow Control Motion Control Metal Treatment Total Segments Consolidated Margin Note: Amounts may not add to the total due to rounding. $1,024.8 647.0 221.3 $985.2 621.0 203.5 $1,893.1 $1,809.7 104.4 80.4 25.8 210.6 (30.8) $179.8 10.2% 12.4% 11.7% 11.1% 9.5% 92.7 80.9 19.9 193.6 (24.2) $169.3 9.4% 13.0% 9.8% 10.7% 9.4% 4.0% 4.2% 8.7% 4.6% 12.6% (0.7%) 29.9% 8.8% 27.1% 6.2% 80 bps (60) bps 190 bps 40 bps 10 bps Segment Information Flow Control Specializes in the design and manufacture of highly engineered valves, pumps, motors, generators, electronics, systems and related products that regulate the fl ow of liquids and gases in severe service environments in power generation, oil and gas processing, naval defense and general industrial applications. Divisions include: Electro-Mechanical Systems High-performance pumps, motors, generators, power conditioning electronics, electronic control integration and protection solutions. Nuclear Group Engineered solutions supporting critical components, systems integration, qualifi cation/dedication and related services that set the standard for safety, quality and high performance on operating reactors and for new plant construction. Oil & Gas Systems Design and manufacture of valves, vessel products, valve automation and control systems, coke unheading systems and fl uidic catalytic cracking unit components. Specialized valve solutions and web-enabled software that control the fl ow of liquids and gases and prevent over-pressurization of vessels, pipelines and equipment. Marine & Power Products Specialized valves that control the fl ow of liquids and gases and prevent over-pressurization of equipment. Shipboard helicopter and cable handling systems. Electronic instrumentation and control equipment, including custom and commercial off-the- shelf electronic circuit boards and systems. 2010 BUSINESS OVERVIEW 17 Electro-Mechanical Systems Reactor Coolant Pump Nuclear Group Performance Hardware and Software Oil & Gas Systems Fractionator Marine & Power Products Shipboard Helicopter Handling System Flow Control Sales General Industrial 9% Power Generation 34% Naval Defense 32% Oil and Gas 25% 18 2010 BUSINESS OVERVIEW Segment Information Motion Control Integrates complex elements for use in fl ight control, mechanical actuation and drive systems, sensing and electronic computing system applications. Divisions include: Embedded Computing Rugged deployed commercial off-the-shelf (COTS) open standards based electronics boards and subsystems for demanding computing, networking and data processing applications, as well as custom software design and hardware manufacturing for aerospace, ground and naval defense markets. Electronic Systems Rugged, integrated electronics for defense, aerospace and general industrial markets. Product and service expertise includes motion control, network-centric computing, vehicle management, sensor management, power management, high-speed data recording and storage, electro-mechanical solutions, electronic contract manufacturing and engineered packaging solutions. Flight Systems Electro-mechanical, electro-hydraulic and hydro-mechanical actuation control components and systems for defense and commercial aerospace applications such as trailing and leading-edge fl ap actuators for passenger aircraft, weapons handling systems, weapons bay door drive systems, lead edge fl ight controls and canopy actuators for military fi ghter aircraft. Integrated Sensing Position, pressure and temperature sensors; smoke and ice detection sensors; solenoids and solenoid valves; air data computers; fl ight data recorders and joysticks for defense and commercial aerospace, along with general industrial markets. Embedded Computing Rugged COTS Boards and Subsystems Electronic Systems Network-Centric Computing Products Flight Systems Commercial Aircraft High-Lift Actuation Components Integrated Sensing Linear Displacement Transducers Motion Control Sales General Industrial 10% Commercial Aerospace 25% Aerospace Defense 38% Other Government 3% Naval Defense 5% Ground Defense 19% Segment Information Metal Treatment Provides services that enhance the performance and extend the life of critical components utilized in aerospace, automotive/transportation, power generation and general industrial markets. Its four primary surface treatment technologies include: Shot Peening Spherical metallic, ceramic or glass balls are directed at a metal component in a controlled manner to impart a benefi cial compressive stress layer on the surface that improves the fatigue resistance and durability of the part. Shot peening is also used to shape the complex aerodynamic curvatures of the wing skins of commercial and business aircraft. Laser Peening A high-energy laser beam generates shock waves at the surface of a metal component to induce benefi cial compressive stresses that are four times deeper than can be achieved by traditional metal treatment processes. This technology provides the highest level of fatigue protection for mission-critical components. Specialty Coatings Solid fi lm lubricant and zinc-rich coating services provide sliding wear, anti-seizing and corrosion resistance in automotive/transportation, commercial aerospace and defense applications. Parylene coating services provide lubricity, moisture barrier resistance and biocompatibility in medical device and electronic applications. Thermal Treatment Air, inert gas and vacuum furnaces are utilized to heat treat metal parts in controlled heating and cooling cycles to improve overall strength, ductility and other mechanical properties. 2010 BUSINESS OVERVIEW 19 Controlled Shot Peening Laser Peening Solid Film Lubricant Coatings Vacuum Heat Treating Metal Treatment Sales General Industrial 39% Defense 13% Power Generation 6% Oil and Gas 3% Commercial Aerospace 39% 20 2010 BUSINESS OVERVIEW Historical Financial Performance Five-Year Review For the years ended December 31, (In millions, except per share data; unaudited) 2010 2009 2008 2007 2006 Performance Net sales Earnings before interest, taxes, depreciation and amortization Net earnings Cash fl ow from operations Earnings per share(1) Basic Diluted Dividends per share(1) Return on sales Return on invested capital(2) New orders Backlog at year end Year-end fi nancial position Working capital Current ratio Total assets Total debt Stockholders’ equity Stockholders’ equity per share(1) Other year-end data Free cash fl ow(3) Depreciation and amortization Capital expenditures Shares of stock outstanding at December 31,(1) Number of registered shareholders Number of employees $1,893.1 $1,809.7 $1,830.1 $1,592.1 $1,282.2 260.3 106.6 171.7 $2.33 2.30 0.32 5.6% 8.3% 246.8 95.2 196.6 $2.10 2.08 0.32 5.3% 8.1% 272.4 109.4 179.8 $2.45 2.41 0.32 6.0% 9.5% 244.3 104.3 139.1 $2.35 2.32 0.28 6.6% 10.3% 191.3 80.6 143.9 $1.84 1.82 0.24 6.3% 9.9% $1,918.5 $1,730.5 $2,232.1 $1,870.4 $1,333.0 $1,670.0 $1,626.9 $1,679.2 $1,303.8 $875.5 $472.1 $313.2 $350.0 $359.6 $330.5 2.1 to 1 1.6 to 1 1.8 to 1 1.9 to 1 2.1 to 1 $2,242.0 $2,142.0 $2,042.0 $1,985.6 $1,592.2 $396.6 $465.1 $1,160.1 $1,026.8 $25.15 $22.50 $118.7 $120.9 $79.9 $53.0 $76.5 $75.6 46,134 45,624 5,470 7,588 5,797 7,572 $516.7 $866.8 $19.23 $76.2 $74.3 $103.7 45,065 6,193 7,968 $511.9 $914.8 $20.51 $84.7 $62.7 $54.4 $364.9 $762.1 $17.31 $103.7 $50.8 $40.2 44,593 44,023 6,331 7,471 6,762 6,233 Note: Amounts may not add to the total due to rounding. (1) Per share data for all years have been adjusted to refl ect a 2-for-1 stock split on April 21, 2006. (2) Return on invested capital is net operating profi t after tax over average net debt plus equity. (3) Free cash fl ow is defi ned as net cash fl ow provided by operating activities less capital expenditures. The Corporation discloses free cash fl ow because the Corporation believes that it is a measurement of cash fl ow that is available for investing and fi nancing activities. Free cash fl ow represents cash generated after paying for interest on borrowings, income taxes, capital expenditures and working capital requirements but before repaying outstanding debt and investing cash or utilizing debt credit lines to acquire businesses and make other strategic investments. Stock Price Range Common 2010 2009 Dividends per Share Common First quarter Second quarter Third quarter Fourth quarter High Low High Low $36.48 $28.32 $36.06 $22.62 First quarter 37.54 31.49 34.01 28.92 26.11 28.78 33.20 36.67 35.20 27.33 27.52 27.97 Second quarter Third quarter Fourth quarter 2010 2009 $0.08 $0.08 0.08 0.08 0.08 0.08 0.08 0.08 2010 BUSINESS OVERVIEW 21 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Curtiss-Wright Corporation Parsippany, New Jersey We have audited the consolidated balance sheets of Curtiss-Wright Corporation and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of earnings, stockholders’ equity and cash fl ows for each of the three years in the period ended December 31, 2010. Such consolidated fi nancial statements and our report thereon dated February 24, 2011, expressing an unqualifi ed opinion (which are not included herein), appear under Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. The accompanying condensed consolidated fi nancial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on such condensed consolidated fi nancial statements in relation to the complete consolidated fi nancial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheets as of December 31, 2010 and 2009, and the related condensed consolidated statements of earnings and of cash fl ows for each of the three years in the period ended December 31, 2010, is fairly stated in all material respects in relation to the consolidated fi nancial statements from which it has been derived. Parsippany, New Jersey February 24, 2011 22 2010 BUSINESS OVERVIEW Condensed Consolidated Statements of Earnings For the years ended December 31, (In thousands, except share and per share data) 2010 2009 2008 Net sales Cost of sales Gross profi t Research and development expenses Selling expenses General and administrative expenses Operating income Interest expense Other income Earnings before income taxes Provision for income taxes Net earnings Net earnings per share: Basic earnings per share Diluted earnings per share Weighted average shares outstanding: Basic Diluted $1,893,134 $1,809,690 $1,830,140 (1,271,381) (1,214,159) (1,214,061) 621,753 (54,131) (111,773) (276,026) 179,823 (22,107) 579 158,295 (51,697) $106,598 $2.33 $2.30 45,823 46,322 595,531 (54,645) (106,187) (265,380) 169,319 (25,066) 1,006 145,259 (50,038) $95,221 $2.10 $2.08 45,237 45,695 616,079 (49,615) (107,308) (262,594) 196,562 (29,045) 1,585 169,102 (59,712) $109,390 $2.45 $2.41 44,716 45,374 2010 BUSINESS OVERVIEW 23 Condensed Consolidated Balance Sheets At December 31, (In thousands, except share data) 2010 2009 Assets Current assets Cash and cash equivalents Receivables, net Inventories, net Deferred tax assets, net Other current assets Total current assets Property, plant and equipment, net Goodwill Other intangible assets, net Deferred tax assets, net Other assets Total assets Liabilities Current liabilities Current portion of long-term and short-term debt Accounts payable Accrued expenses Income taxes payable Deferred revenue Other current liabilities Total current liabilities Long-term debt Deferred tax liabilities, net Accrued pension and other postretirement benefi t costs Long-term portion of environmental reserves Other liabilities Total liabilities Contingencies and Commitments Stockholders’ equity $68,119 461,632 281,103 48,568 40,605 900,027 397,280 693,572 240,197 1,033 9,909 $65,010 404,539 285,608 48,777 33,567 837,501 401,149 648,452 242,506 1,994 10,439 $2,242,018 $2,142,041 $2,602 133,180 99,966 3,111 146,770 42,310 427,939 394,042 26,815 166,591 19,091 47,437 $80,981 129,880 90,855 4,212 167,683 50,708 524,319 384,112 25,549 120,930 18,804 41,570 1,081,915 1,115,284 Com mon stock, $1 par value, 100,000,000 shares authorized at December 31, 2010 and 2009; 48,558 48,214 48,557,638 and 48,213,472 shares issued at December 31, 2010 and 2009, respectively; outstanding shares were 46,133,766 at December 31, 2010 and 45,624,179 at December 31, 2009 Additional paid in capital Retained earnings Accumulated other comprehensive loss Less: Common treasury stock, at cost (2,423,872 shares at December 31, 2010 and 2,589,293 shares at December 31, 2009) Total stockholders’ equity Total liabilities and stockholders’ equity 130,093 1,072,459 (2,813) 1,248,297 (88,194) 111,707 980,590 (19,605) 1,120,906 (94,149) 1,160,103 $2,242,018 1,026,757 $2,142,041 24 2010 BUSINESS OVERVIEW Condensed Consolidated Statements of Cash Flows For the years ended December 31, (In thousands) Cash fl ows from operating activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization Net loss on sales and disposals of long-lived assets Gain on bargain purchase Deferred income taxes Share-based compensation Changes in operating assets and liabilities, net of businesses acquired and disposed of: (Increase) decrease in receivables Decrease (increase) in inventories Increase (decrease) in progress payments Increase (decrease) in accounts payable and accrued expenses (Decrease) increase in deferred revenue Decrease in income taxes payable Increase in net pension and postretirement liabilities Decrease in other current and long-term assets Decrease in other current and long-term liabilities Total adjustments Net cash provided by operating activities Cash fl ows from investing activities Proceeds from sales and disposals of long-lived assets Acquisitions of intangible assets Additions to property, plant and equipment Acquisition of businesses, net of cash acquired Net cash used for investing activities Cash fl ows from fi nancing activities Borrowings of debt Principal payments on debt Proceeds from exercise of share-based payments Dividends paid Excess tax benefi ts from share-based compensation Net cash used for fi nancing activities Effect of exchange-rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Supplemental disclosure of investing activities Fair value of assets acquired from current-year acquisitions Additional consideration paid (received) on prior year acquisitions Liabilities assumed from current year acquisitions Cash acquired Gain on bargain purchase Acquisition of businesses, net of cash acquired 2010 2009 2008 $106,598 $95,221 $109,390 79,946 1,446 – 2,828 13,378 (60,208) 10,640 6,493 9,925 (20,913) (1,122) 24,528 1,205 (3,304) 65,112 171,710 744 (1,608) (52,980) (42,200) (96,044) 76,480 1,917 (1,937) (6,470) 15,264 9,250 17,819 (8,573) (30,565) 28,724 (11,326) 19,654 2,319 (11,198) 101,358 196,579 3,789 (673) (75,643) (68,623) 74,251 804 – (6,370) 13,663 (20,230) (46,564) 8,227 8,582 33,332 (4,044) 11,416 2,250 (4,886) 70,431 179,821 8,143 (311) (103,657) (48,557) (141,150) (144,382) 513,100 711,059 598,000 (581,771) (762,759) (622,580) 10,560 (14,729) 985 10,557 (14,559) 378 (71,855) (55,324) (702) 3,109 65,010 $68,119 4,200 4,305 60,705 $65,010 9,905 (14,381) 1,544 (27,512) (13,742) (5,815) 66,520 $60,705 $49,939 $81,103 $133,159 1,153 (8,206) (686) – $42,200 1,835 (12,102) (276) (1,937) $68,623 (1,447) (75,156) (7,999) – $48,557 Shareholder Information Corporate Headquarters 10 Waterview Boulevard, 2nd Floor Parsippany, New Jersey 07054 www.curtisswright.com Tel: (973) 541-3700 Annual Meeting The 2011 annual meeting of stockholders will be held on May 6, 2011 at 10:00 a.m. at the Parsippany Sheraton Hotel, 199 Smith Road, Parsippany, New Jersey 07054. Stock Exchange Listing The Corporation’s common stock is listed and traded on the New York Stock Exchange under the symbol CW. Common Shareholders As of December 31, 2010 the approximate number of holders of record of common stock, par value of $1.00 per share of the Corporation, was 5,470. Forward-Looking Statements This brochure contains not only historical information, but also forward-looking statements regarding expectations of future performance of the Corporation. Forward-looking statements involve risk and uncertainty. Please refer to the Corporation’s 2010 Annual Report on Form 10-K for a discussion relating to forward-looking statements contained in this brochure and risk factors that could cause future results to differ from current expectations. Stock Transfer Agent and Registrar For services such as changes of address, replacement of lost certifi cates or dividend checks and changes in registered ownership or for inquiries as to account status, write to American Stock Transfer & Trust Company at 59 Maiden Lane, New York, New York 10038. Please include your name, address and telephone number with all correspondence. Telephone inquiries may be made to (800) 937-5449 or (212) 936-5100 internationally. Internet inquiries should be directed to www.amstock.com. Hearing-impaired shareholders are invited to log on to the website and select the Live Chat option. Direct Stock Purchase Plan/Dividend Reinvestment Plan A plan is available to purchase or sell shares of Curtiss-Wright common stock. The plan provides a low- cost alternative to the traditional methods of buying, holding and selling stock. The plan also provides for the automatic reinvestment of Curtiss-Wright dividends. For more information, contact our transfer agent, American Stock Transfer & Trust Company toll free at (800) 416-3743. Investor Information Investors, stockbrokers, security analysts and others seeking information about Curtiss-Wright Corporation should contact James M. Ryan, Director of Investor Relations, at the Corporate Headquarters. Shareholder Communications Any stockholder wishing to communicate directly with our Board of Directors should write to Dr. William W. Sihler at Southeastern Consultants Group, Ltd., P.O. Box 5645, Charlottesville, Virginia 22905. Financial Reports This brochure includes some of the periodic fi nancial information required to be on fi le with the Securities and Exchange Commission. The Corporation also fi les an Annual Report on Form 10-K, a copy of which may be obtained free of charge. These reports, as well as additional fi nancial documents such as quarterly shareholder reports, proxy statements and quarterly reports on Form 10-Q, may be obtained by written request to James M. Ryan, Director of Investor Relations, at the Corporate Headquarters or at the Corporation’s website: www.curtisswright.com. n o i s s i m m o C y r o t a l u g e R r a e l c u N . S . U , y v a N . S . U , n o i t a r o p r o C n a m m u r G p o r h t r o N , y n a p m o C g n i e o B e h T , s u b r i A : f o y s e t r u o c s o t o h P . c n I , t l u a b e h T h t r a E : g n i t n i r P . s e t a i c o s s A n a m n e s i E : n g i s e D Directors Martin R. Benante Chairman of the Board of Directors S. Marce Fuller Former President and Chief Executive Offi cer of Mirant Corporation, Inc. (formerly known as Southern Energy, Inc.) Director, Earthlink, Inc. Dr. Allen A. Kozinski Former Vice President of Global Refi ning of British Petroleum PLC Carl G. Miller Former Chief Financial Offi cer of TRW, Inc. William B. Mitchell Trustee, Mitre Corporation Former Vice Chairman of Texas Instruments Inc. John R. Myers Former Chairman and Chief Executive Offi cer of Tru-Circle Corporation Management Consultant Former Chairman of the Board of Garrett Aviation Services John B. Nathman Admiral, U.S. Navy (Ret.) Dr. William W. Sihler Ronald E. Trzcinski Professor of Business Administration, Darden Graduate School of Business Administration, University of Virginia Albert E. Smith Director, Tetra Tech, Inc. Former Executive Vice President and Offi cer of Lockheed Martin Corporation Offi cers Martin R. Benante Chief Executive Offi cer David C. Adams Co-Chief Operating Offi cer David J. Linton Co-Chief Operating Offi cer Thomas P. Quinly Vice President Glenn E. Tynan Vice President and Chief Financial Offi cer Michael J. Denton Vice President, General Counsel and Corporate Secretary Harry S. Jakubowitz Vice President and Treasurer Glenn G. Coleman Vice President and Corporate Controller 26 2010 BUSINESS OVERVIEW Curtiss-Wright Corporation 10 Waterview Boulevard Parsippany, New Jersey 07054 www.curtisswright.com 

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