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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.14pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.22pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
negatively+4
stoppages+2
failure+1
delays+1
investigation+1
Positive rising
able+1
benefit+1
efficiencies+1
better+1
beautiful+1
Risk Factors (Item 1A)
10,419 words
Item 1A. Risk Factors.
We have summarized the known, material risks to our business below. Our business, financial condition, results of operations and cash flows could be materially and adversely impacted if any of these risks materialize. Additional risk factors not currently known to us or that we believe are immaterial may also impair our business, financial condition, and results of operations and cash flows, and require significant management time and attention. The risk factors below should be considered together with information included elsewhere in this Annual Report on Form 10-K as well as other required filings by us to the Securities Exchange Commission, such as our Form 10-Q’s, Form 8-K’s, proxy statements for our annual shareholder meetings, and subsequent amendments, if any.
RISKS RELATED TO OUR OPERATIONS
Intrusion on our systems could damage our business.
We store sensitive data, including intellectual property, proprietary business information, and confidential employee information on our servers and databases. As a result, we are increasingly dependent upon our information systems to operate and manage our business. Our ability to effectively operate and manage our business depends on the security, reliability, and adequacy of our information systems. In addition, various privacy and cybersecurity laws and regulations, both in the U.S. and globally, require us to manage and protect sensitive and confidential information, including personal data of our employees, from disclosure. For example, the European Union’s General Data Protection Regulation, which became in May 2018, extends the scope of the European Union data protection laws to all companies processing data of European Union residents, regardless of the company’s location. our implementation of firewalls, switchgear, and other network security measures, our servers, databases, and other systems may be to various cyber and other security , including those caused by computer hackers, physical or electronic -ins, , computer viruses, malware, worms, and similar from access and tampering with our computer systems, including through social engineering such as phishing attacks, coordinated -of-service attacks, and similar . Such intrusions could result in our network security or computer systems being compromised and possibly result in the or of sensitive information, including intellectual property, or cause in our services. To the extent artificial intelligence capabilities and are increasingly adopted, they may be used to identify and produce advanced cybersecurity attacks, and may be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers. The occurrence of some of these risks may be increased due to the work-from-home arrangements that we have implemented for many of our office-based employees. We continue to review and our computer systems as well as provide training to our employees in an attempt to prevent and intrusions. However, it is possible that we may not be to prevent all intrusions. While we carry cyber insurance, we still may be required to expend significant capital and resources to protect , remediate, or alleviate caused by such intrusions. Any such could cause us to be non-compliant with applicable laws or regulations, subject us to legal or proceedings, our operations, our reputation, and cause a of confidence in our products and services, any of which could have a material effect on our business, financial condition, and results of operations.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
restructuring+2
critical+1
volatility+1
weaken+1
challenging+1
Positive rising
favorable+4
strong+3
despite+3
opportunities+2
excellence+2
MD&A (Item 7)
9,247 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Our Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") begins with an overview of our company, followed by economic and industry-wide factors impacting our company and the markets we serve, a discussion of the overall results of operations, and finally a more detailed discussion of those results within each of our reportable segments.
COMPANY ORGANIZATION
Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions, and services mainly to A&D markets, as well as critical technologies in demanding commercial nuclear power, process, and industrial markets. We maintain competitive positions in the majority of our key A&D and commercial end markets through engineering and technological leadership, consistent investments in research and development, precision manufacturing, and long-standing relationships. We continue to leverage our teams’ collaborative efforts and the strength of our combined portfolio, while also seeking to build upon cross-market opportunities that may exist within our defense and commercial market technologies.
Additionally, we have incurred, and expect to continue to incur, additional costs to comply with increased cybersecurity protections and information control requirements for our customers, including the U.S. government. A failure to comply with these requirements could negatively impact our business and financial condition.
Potential product liability risks exist from the products that we sell.
We may be exposed to liabilities for personal injury, death, or property damage due to the failure of a product that we have sold. We typically agree to indemnify our customers against certain liabilities resulting from the products we sell, and any third-
party indemnification we seek from our suppliers and our liability insurance may not fully cover our indemnification obligations to customers. We may also not be able to maintain insurance coverage in the future at an acceptable cost. Any liability for which third-party indemnification is not available and not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations. In addition, the failure of a product that we have sold c ould also result in a recall of, or safety alert relating to, such product which could ultimately result, in certain cases, in the removal of such product from the marketplace and claims regarding costs associated therewith.
Furthermore, an accident caused by one of our products could damage our reputation for selling quality products. We believe that our customers consider safety and reliability as key criteria in selecting our products and believe that our reputation for quality assurance is a significant competitive strength. If an accident were to be caused by one of our products, or if we were to otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.
We are subject to liability under warranty obligations .
The majority of our contracts contain provisions which expose us to potential liability for warranty claims made by customers or third parties with respect to products that have been designed, manufactured, or serviced by us or our suppliers. While we maintain insurance coverage with respect to certain liability claims, that insurance coverage may not be adequate to cover all claims that may arise, or we may not be able to maintain adequate insurance coverage in the future at an acceptable cost. Material product warranty obligations not covered by insurance or that exceed our established reserves could have a material adverse effect on our business, financial condition, and results of operations.
Our earnings and margins depend in part on subcontractor performance, as well as raw material and component availability and pricing.
Our businesses depend on suppliers and subcontractors for raw materials and components, as well as services that we provide to our customers. Our supply chain has been and may continue to be impacted by a wide variety of factors, including supplier capacity constraints, sanctions and trade restrictions and other governmental regulatory actions or inactions, labor and material shortages as well as tariffs and other geopolitical events, such as the Russia-Ukraine war and China’s relationship with the United States and Taiwan. Because we strive to limit the volume of raw materials and component parts on hand, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities that we require. Generally, raw materials and purchased components are available from a number of different suppliers, though several suppliers are our sole source of certain components. If a sole-source supplier is delayed or should cease or otherwise be unable to deliver such components, we may not be able to produce the related product in a timely manner or in sufficient quantities, if at all, which could adversely affect our operating results. A sole-source supplier of a key component could also potentially exert significant bargaining power over price, quality, warranty claims, or other terms relating to these materials, which could have a material adverse effect on our financial condition, results of operations, and cash flows.
In addition, supply chain constraints and improving economic conditions have resulted in sustained increases in the prices we pay for many of the components and raw materials used in our products. Furthermore, we are experiencing higher labor costs due to increased competition for personnel in many regions in which we operate as well as general inflationary conditions, including higher shipping costs, labor shortages, and rising energy prices. Our ability to perform our obligations as a prime contractor may be adversely affected if one or more of these suppliers is unable to provide the agreed-upon supplies or perform the agreed-upon services in a timely and cost-effective manner. While we have attempted to mitigate the effects of increased costs through price increases, there are no assurances that higher prices can effectively be passed through to our customers, or that we will be able to fully offset the effects of higher raw materials costs through price increases on a timely basis.
We also depend on subcontractors and suppliers to meet their contractual obligations in full compliance with customer requirements. Nonperformance or underperformance by subcontractors and suppliers could materially impact our ability to perform obligations to our customers, which could result in a customer terminating our contract for default, expose us to liability, and substantially impair our ability to compete for future contracts and orders.
Our business involves risks associated with complex manufacturing processes.
Our manufacturing processes depend on certain sophisticated and high-value equipment. Unexpectedfailures of this equipment may result in production delays, revenue loss, and significant repair costs. In addition, equipment failures could result in injuries to our employees. Moreover, the competitive nature of our businesses requires us to continuously implement process changes intended to achieve product improvements and manufacturing efficiencies. These process changes may at times result
in production delays, quality concerns, and increased costs. Any disruption of operations at our facilities due to equipment failures or process interruptions could have a material adverse effect on our business.
RISKS RELATED TO OUR STRATEGY
Implementing our acquisition strategy involves risks, and our failure to successfully implement this strategy could have a material adverse effect on our business.
As part of our capital allocation strategy, we aim to grow our business by selectively pursuing acquisitions and technologies that supplement our organic growth, some of which may be material to our business and financial performance. Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for several reasons, including:
• Encountering difficulties identifying and executing acquisitions;
• Increased competition for targets, which may increase acquisition costs;
• Consolidation in our industry, reducing the number of acquisition targets;
• Competition laws and regulations preventing us from making certain acquisitions; and
• Acquisition financing not being available on acceptable terms, or at all.
In addition, there are potential risks associated with growing our business through acquisitions, including the failure to successfully integrate and realize the expected benefits of an acquisition. For example, with any past or future acquisition, there is the possibility that:
• The business culture of the acquired business may not match well with our culture;
• Technological and product synergies, economies of scale, or cost reductions may not occur as expected;
• Management may be distracted from overseeing existing operations by the need to integrate acquired businesses;
• We may acquire or assume unexpected liabilities;
• We may experience unforeseendifficulties in integrating operations and systems;
• We may fail to retain or assimilate employees of the acquired business;
• We may experience problems in retaining customers or integrating customer bases;
• We may experience increased capital requirements;
• There could be insufficient internal controls over financial activities or financial reporting at an acquired company that could impact us on a consolidated basis; and
• We may encounter difficulties in entering new markets in which we may have little or no experience.
While we conduct financial and other due diligence in connection with our acquisitions and generally seek some form of protection, such as indemnification from the seller, insurance coverage, and sometimes placing a portion of the purchase price in escrow or a cash holdback to cover potential liabilities, such acquired companies may have weaknesses or liabilities that are not accurately assessed or brought to our attention at the time of the acquisition. Further, indemnities, insurance or escrow/holdback arrangements may not fully cover such matters and acquisitions of public companies typically do not include post-closing indemnities or escrows.
Failure to successfully implement our acquisition strategy, including successfully integrating acquired businesses, could have a material adverse effect on our business, financial condition, and results of operations.
Our future success will depend, in part, on our ability to develop new technologies.
The commercial and government markets in which we operate are characterized by rapidly changing technologies. In addition, product and program needs of our government and commercial customers change and evolve regularly. Accordingly, to remain competitive in the future, we will need to continue to invest financial resources, including through internal research and development, acquisitions, or other teaming arrangements, to: (a) identify emerging technological trends in our current and target markets; (b) develop and manufacture competitive products, systems, and services; (c) enhance our offerings by adding technological innovations that differentiate our products, systems, and services from those of our competitors; and (d) develop, manufacture, and bring those products, systems, and service to market quickly at cost-effective prices. These expenditures could divert our attention and resources from other projects, and we cannot be sure that these expenditures will ultimately lead to the timely development of new offerings and technologies or identification of and expansion into new markets. Due to the design complexity of our products, we may, in the future, experience delays in completing the development and introduction of new products. Any delays could result in increased costs of development or deflect resources from other projects. In addition, there can be no assurance that the market for our products will develop or continue to expand or that we will be successful in
newly identified markets as we currently anticipate. Furthermore, while we do not currently use artificial intelligence (“AI”) in the design and development of our products, we may seek to utilize AI in the future. The development, deployment, and integration of AI technologies presents risks, challenges, and potential unintended consequences that could affect our business. Given that laws and regulations around AI are continuously evolving, our obligation to comply with them could entail significant costs, negatively affect our business, or hinder our ability to incorporate certain AI capabilities into our operations and products.
We operate in highly competitive markets.
Many of our products and services are sold in highly competitive markets, and are affected by varying degrees of competition, including competition for hiring and retaining skilled labor. We compete against companies that often have higher sales volumes and greater financial, technological, research and development, human, and marketing resources, and larger customer bases than we have. These companies may also price their products and services below our selling prices, which could exert downward pressure on our product pricing and margins. As a result, they may be betterable to withstand the effects of periodic economic downturns. In addition, some of our largest customers could develop the capability to manufacture products or provide services similar to products that we manufacture or services that we provide. This would result in these customers supplying their own products or services and competing directly with us for sales of these products or services, all of which could significantly reduce our revenues. Furthermore, we are facing increased international competition and cross-border consolidation of competition. If consolidation of our competition continues to occur, we would expect the competitive pressures we face to increase. Our management believes that the principal points of competition in our markets are technology, price, product quality, product performance, sufficient supply of necessary components, technical expertise, timeliness of delivery, superior customer service and support, and continued certification under customer quality requirements and assurance programs. If we are unable to compete successfully with existing or new competitors in these areas, we may experience a material adverse effect on our business, financial condition, and results of operations.
We may be unable to protect the value of our intellectual property.
Obtaining, maintaining, and enforcing our intellectual property rights and avoiding infringing on the intellectual property rights of others are important factors to the operation of our business. While we take precautionary steps to protect our technological advantages and intellectual property and rely in part on patent, trademark, trade secret, and copyright laws, we cannot assure that the precautionary steps we have taken will completely protect our intellectual property rights. Because patent applications in the United States are maintained in secrecy until either the patent application is published or a patent is issued, we may not be aware of third-party patents, patent applications, and other intellectual property relevant to our products that may block our use of our intellectual property or may be used in third-party products that compete with our products and processes. When others infringe on our intellectual property rights, the value of our products is diminished, and we may incur substantial litigation costs to enforce our rights. Similarly, we may incur substantial litigation costs and the obligation to pay royalties if others claim we infringed on their intellectual property rights. When we develop intellectual property and technologies with funding from U.S. Government contracts, the government has the royalty-free right to use that property.
In addition to our patent rights, we also rely on unpatented technology, trade secrets, and confidential information. Others may independently develop substantially equivalent information and techniques or otherwise gain access to or disclose our technology. We may not be able to protect our rights in unpatented technology, trade secrets, and confidential information effectively. We generally require each of our employees and consultants to execute a confidentiality agreement at the commencement of an employment or consulting relationship with us. There is no guarantee that we will succeed in obtaining and retaining executed agreements from all employees or consultants. Moreover, these agreements may not provide effective protection of our information or, in the event of unauthorized use or disclosure, they may not provide adequate remedies.
RISKS RELATED TO MARKET CONDITIONS
A substantial portion of our revenues and earnings depends upon the continued willingness of the U.S. Government and other customers in the defense industry to buy our products and services.
In 2025, approximately 47% of our total net sales were derived from or related to U.S. defense programs. U.S. defense spending has historically been cyclical and is subject to periodic congressional action. The level of U.S. defense spending can vary and may be impacted by numerous outside factors, such as changes in the perceived threat environment, the U.S. Government’s budget deficits, spending priorities, and possible political pressure to reduce U.S. Government military spending, each of which could cause the DoW budget to remain unchanged or to decline. Generally, an increase in the level of concern over the country’s safety tends to increase defense budgets. However, we cannot provide assurance that an increase in defense spending would benefit our business. At other times, spending by the military can decrease. Decreases in U.S. defense spending, changes
in the allocation of defense spending, or the expiration or termination of certain aerospace and defense programs on which we have content could result in a reduction in our revenues and earnings and could have a material adverse effect on our business, financial condition, and results of operations.
U.S. lawmakers on several occasions have passed legislation to raise the federal debt ceiling, the most recent of which was through the passage on July 4, 2025 of the One Big Beautiful Bill Act ("OBBBA"), which raised the federal debt ceiling by $5 trillion. Failure by Congress to further suspend or increase the debt ceiling could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S. government contracts, even if the U.S. government is unable to make timely payments.
A downturn in the commercial aircraft market could adversely affect our business.
Our sales to large commercial aircraft manufacturers, such as Boeing, Airbus, and related OEM suppliers, as well as manufacturers of business jets, are cyclical in nature, and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns (inclusive of climate change), intense price competition, high interest rates, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, labor strikes such as the International Association of Machinists and Aerospace workers union work stoppages at Boeing, geopolitical events, conflicts and wars (including the Russia-Ukraine war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside of our control. For example, the COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus. The reduced air traffic applied financial pressures on airlines, who, in order to preserve cash and liquidity, dramatically reduced flight hours and cancelled or delayed the purchases of new aircraft. Furthermore, as companies and employees become accustomed to working remotely, there is a risk that business travel and the associated flight hours may be impacted. Any decrease in demand resulting from a downturn in the aerospace market could adversely affect our business, financial condition, and results of operations.
Our backlog is subject to reduction and cancellation, which could negatively impact our revenues and results of operations.
Backlog represents products or services that our customers have contractually committed to purchase from us. As we are a subcontractor to prime contractors for the vast majority of our government business, substantially all amounts in backlog are funded. Backlog excludes unexercised contract options and potential orders under ordering type contracts (e.g. Indefinite Delivery / Indefinite Quantity). Further, it is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur. Backlog as of December 31, 2025 was approximately $4.1 billion. Backlog is subject to fluctuations and is not necessarily indicative of future sales. The timing of backlog may be impacted by project delays. The U.S. Government may unilaterally modify or cancel its contracts. In addition, under certain of our commercial contracts, our customers may unilaterally modify or terminate their orders at any time for their convenience. Accordingly, certain portions of our backlog can be cancelled or reduced at the option of the U.S. Government and commercial customers. Our failure to replace cancelled or reduced backlog could negatively impact our results of operations.
As a U.S. Government contractor, we are subject to numerous procurement rules and regulations.
We must comply with and are affected by laws and regulations relating to the award, administration, and performance of U.S. Government contracts, which in some instances, impose added costs on our business. These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could further significantly increase our costs and risks and reduce our profitability. We have been, and expect to continue to be, subjected to audits, reviews, and investigation by government agencies. A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, debarment from bidding on contracts, harm to our business reputation, or result in our progress payments being withheld. These fines and penalties could be imposed, for example, by failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or paying kickbacks, or filing falseclaims. In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions. For example, the U.S. Government may terminate any of our government contracts and, in general, subcontracts, at its convenience as well as for default based on performance. Upon termination for convenience of a fixed-price type contract, we normally are entitled to receive the purchase price for delivered items, reimbursement for allowable costs for work-in-process, and an allowance for profit on work actually completed on the contract or adjustment for loss if completion of performance would have resulted in a loss. Upon termination for convenience of a cost reimbursement contract, we normally are entitled to reimbursement of allowable costs plus a portion of the fee. Such allowable costs would normally include our cost to terminate agreements with our suppliers and subcontractors. The amount of the fee recovered, if any, is related to the portion of the work accomplished prior to termination and is determined by negotiation.
A termination arising out of our default could have a material adverse effect on our ability to compete for future contracts and orders. In addition, on those contracts for which we are teamed with others and are not the prime contractor, the U.S. Government could terminate a prime contract under which we are a subcontractor, irrespective of the quality of our services as a subcontractor.
Our U.S. Government contracts typically span one or more base years and multiple option years. The U.S. Government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with our performance on the contract or does not receive funding to continue the program. U.S. Government procurement may adversely affect our cash flow or program profitability.
Furthermore, we are subject to other risks in connection with government contracts, including without limitation:
• the frequent need to bid on programs prior to completing the necessary design, which may result in unforeseen technological difficulties and/or cost overruns;
• the difficulty in forecasting long-term costs and schedules and the potential obsolescence of products related to long-term, fixed price contracts;
• contracts with varying fixed terms that may not be renewed or followed by follow-on contracts upon expiration;
• cancellation of the follow-on production phase of contracts if program requirements are not met in the development phase; and
• the fact that government contract wins can be contested by other contractors.
Our operations are subject to numerous domestic and international laws, regulations, and restrictions. Noncompliance with these laws, regulations, and restrictions could expose us to fines, penalties, suspension, or debarment, which could have a material adverse effect on our profitability and overall financial condition.
We have contracts and operations in many parts of the world subject to United States and foreign laws and regulations, including the FalseClaims Act, regulations relating to import-export control (including the International Traffic in Arms Regulation promulgated under the Arms Export Control Act), sanctions programs implemented by the Office of Foreign Assets Control of the U.S. Department of Treasury ("OFAC"), technology transfer restrictions, repatriation of earnings, exchange controls, the Foreign Corrupt Practices Act, the U.K. Anti-Bribery Act, and the anti-boycott provisions of the U.S. Export Administration Act. Although we have implemented policies and procedures and provided training that we believe are sufficient to address these risks, we cannot guarantee that our operations will always comply with these laws and regulations. From time to time, we may file voluntary disclosure reports with the U.S. Department of State, the Department of Energy, the Department of Commerce, and the Department of Treasury regarding certain violations of U.S. export control laws and regulations and OFAC sanctions discovered by us in the course of our business activities, employee training, or internal reviews and audits. To date, our voluntary disclosures have not resulted in a fine, penalty, or export privilege denial or restriction that has had a material adverse impact on our financial condition or ability to export. Our failure, or failure by our sales representatives or consultants to comply with these laws and regulations could result in administrative, civil, or criminal liabilities and could, in the extreme case, result in suspension or debarment from government contracts or suspension of our export privileges, which could have a material adverse effect on our business.
Any significant disruption in the commercial nuclear power industry, including delays in the development of small modular reactors, could adversely affect our results of operations or future outlook.
Market demand for, and our ability to supply products and services to the commercial nuclear industry is dependent on the continued operation of nuclear power plants globally and, to a lesser extent, on the construction of new nuclear power plants. A wide range of factors affect the continued operation and construction of nuclear power plants, including the political, regulatory and legal environment in which they operate, the availability and cost of alternative means of power generation, the occurrence of future nuclear incidents, such as the one which occurred at the Fukushima Daiichi nuclear plant in 2011, and general economic conditions. Any reduction in demand for our commercial nuclear products and services in the U.S. or abroad could adversely affect our business, financial condition, and results of operations.
Our nuclear business subjects us to various regulatory and financial risks.
Our Naval & Power segment manufactures components for, and provide services to, customers in the nuclear power market, including utilities and certain governmental entities, and subjects us to various safety related requirements imposed by the U.S. Government, the Department of Energy, the Nuclear Regulatory Commission, and other agencies in foreign jurisdictions. In the event of non-compliance, these agencies might increase regulatory oversight, impose fines, or shut down operations, depending
on their assessment of the severity of the noncompliance. In addition, new or revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures.
The Price-Anderson Act promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S. Department of Energy (“DOE”) contractors for liabilities arising out of nuclear incidents at power plants licensed by the Nuclear Regulatory Commission (“NRC”) and at DOE nuclear facilities. That indemnification protects not only the NRC licensee or DOE prime contractor, but also others like us who may be doing work under contract or subcontract for a licensed power plant or under a DOE prime contract. The Price-Anderson Act indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry. If an incident or evacuation is not covered under the Price-Anderson Act’s indemnification provisions, we could be held liable for damages, regardless of fault. In addition, if such indemnification authority is not applicable in the future, for instance, our business could be adversely affected if the owners and operators of nuclear power plants fail to retain our services in the absence of commercially adequate insurance and indemnification.
We offer similar services in other jurisdictions outside the United States. For those jurisdictions, varying levels of nuclear liability protection is provided by international treaties, and/or domestic laws, such as the Nuclear Liability and Compensation Act of Canada and the Nuclear Installations Act of the United Kingdom, insurance and/or assets of the nuclear installation operators (some of which are backed by governments) as well as under appropriate enforceable contractual indemnifications and hold-harmless provisions. These protections and indemnifications, however, may not cover all of our liability that could arise in the performance of these services.
The airline industry is heavily regulated, and if we fail to comply with applicable requirements, our results of operations could suffer.
Governmental agencies throughout the world, including the U.S. Federal Aviation Administration ("FAA") and the European Aviation Safety Agency, prescribe standards and qualification requirements for aircraft components, including virtually all commercial airline and general aviation products. Specific regulations vary from country to country, although compliance with FAA requirements generally satisfies regulatory requirements in other countries. We include documentation with our products sold to aircraft manufacturing customers certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries. In order to sell our products, we as well as the products that we manufacture must also be certified by our individual OEM customers. If any of the material authorizations or approvals qualifying us to supply our products is revoked or suspended, then the sale of such product would be prohibited by law, which would have an adverse effect on our business, financial condition, and results of operations.
In addition, from time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations. If these proposed regulations are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition, and results of operations.
We are subject to liability under environmental and health and safety laws and regulations.
Our business and facilities are subject to numerous federal, state, local, and foreign laws and regulations relating to the use, manufacture, storage, handling, and disposal of hazardous materials and other waste products used in the manufacturing of certain of our products or providing certain of our services, and we are subject to potentially significant fines or penalties, including criminal sanctions, as well as facility shutdowns to address violations, and may require the installation of costly pollution control equipment or operational changes to limit emissions or discharges . W e may also be subject to increasingly stringent environmental standards in the future, particularly as greenhouse gas emissions and climate change regulations and initiatives increase. Regulatory bodies may decide in the future to limit or ban certain materials we use in our manufacturing process due to potentially significant health and safety risks to people or the environment. Such limitations or bans may in the future require us to consider the use of alternative raw materials or changes to our method of operations. Such alternatives often require customer approval and may result in additional costs, including higher raw material expenses, changes in operational methods, and additional customer qualifications. The formulation changes could also impact the utility of our products.
Environmental laws generally impose liability for investigation, remediation, and removal of hazardous materials and other waste products on property owners and those who dispose of materials at waste sites, whether or not the waste was disposed of legally at the time in question. We are currently addressing environmental remediation at certain current and former facilities, and we have been named as a potentially responsible party along with other organizations in a number of environmental clean-up sites and may be named in connection with future sites. We are required to contribute to the costs of the investigation and
remediation and to establish reserves in our financial statements for future costs deemed probable and estimable. Although we have estimated and reserved for future environmental remediation costs, the final resolution of these liabilities may significantly vary from our estimates and could potentially have an adverse effect on our results of operations and financial position.
We are also subject to federal, state, local, and foreign laws and regulations governing worker health and safety requirements. Failing to comply with these laws and regulations could have an adverse effect on our operating results.
We may be subject to periodic litigation and regulatory proceedings, which may adversely affect our business and financial performance.
From time to time, we are involved in lawsuits and regulatory actions brought or threatenedagainst us in the ordinary course of business. These actions and proceedings may involve claims for, among other things, asbestos and environmental exposures, intellectual property matters, copyright infringement, compensation for alleged personal injury, workers’ compensation, employment and employee benefit matters, government contract issues, commercial or contract disputes, and acquisitions or divestitures. We also may be subject to class action lawsuits, such as those involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws. Due to the inherent uncertainties of litigation, the ultimate outcome is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts in these types of lawsuits, including punitivedamages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief, and the magnitude of the potential loss may remain unknown for substantial periods of time. These proceedings could also result in substantial cost to defend ourselves and may require us to devote substantial employee resources, which could distract our management from the operation of our business. Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses. The ultimate resolution of these matters through settlement, mediation, or court judgment could have a material impact on our financial condition, results of operations, and cash flows.
Our business, financial condition, and results of operations could be materially adversely affected by climate change regulations.
Climate change regulations at the federal, state, or local level or in international jurisdictions could require us to limit emissions, change our manufacturing processes, obtain substitute materials which may cost more or be less available, increase our investment in control technology for greenhouse gas emissions, fund offset projects, or undertake other costly activities. These regulations could significantly increase our costs and restrict our manufacturing operations by virtue of requirements for new equipment. New permits may be required for our current operations, or expansions thereof. Failure to timely receive permits could result in fines, suspension of production, or cessation of operations at one or more facilities. In addition, restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs such as higher energy costs and the passing down of carbon taxes, emission cap and trade programs, and renewable portfolio standards by utility companies. The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse effect on our operating results.
Increasing focus on environmental, social, and governance responsibility may impose additional costs on us and expose us to new risks.
Regulators, stockholders, and other interested constituencies have focused increasingly on corporate responsibility, specifically related to the environmental, social, and governance ("ESG") or sustainability practices of companies, including climate change over the past few years, and expectations in this area are rapidly evolving . The criteria used to evaluate ESG practices may continue to evolve, which could result in greater expectations and may cause us to undertake costly initiatives to satisfy new criteria and abide by any new disclosure requirements. Some investors have used, and may continue to use, ESG criteria to guide their investment strategies, and may not invest in us, or divest their holdings of us, if they believe our policies relating to ESG matters are inadequate. Our customers may also require us to implement environmental, social, or governance responsibility procedures or standards before they continue to do business with us. Additionally, we may face reputational challenges if our ESG procedures or standards do not meet the standards set by certain constituencies, which are often inconsistent in approach . Furthermore, from time to time, we may communicate certain initiatives or goals regarding ESG matters. Although we intend to meet these commitments, we may be required to expend significant resources to do so, which could increase our operational costs. Further, there can be no assurance of the extent to which any of our commitments will be achieved, if at all. In addition, we could be criticized for the scope of such initiatives or goals or perceived as not acting responsibly in connection with these matters. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.
RISKS RELATED TO FINANCIAL MATTERS
Political and economic changes in foreign countries and markets, including foreign currency fluctuations, may have a material effect on our operating results.
During 2025, approximat e ly 27% of ou r total net sales were to customers outside of the United States. Additionally, we also have operating facilities located in foreign countries. Doing business in foreign countries is subject to numerous risks, including without limitation: (a) political and economic instability and potential for social unrest; (b) the uncertainty of the ability of non-U.S. customers to finance purchases; (c) restrictions on the repatriation of funds; (d) restrictive trade policies; (e) tariff regulations; (f) difficulties in obtaining export and import licenses; (g) government financed competition; (h) changes in the local labor-relations climate; (i) economic conditions in local markets, including changes in inflation; (j) health concerns (including COVID-19 or any of its variants); (k) complying with foreign regulatory and tax requirements that are subject to change; and (l) limitations on our ability to enforce legal rights and remedies. For example, in response to Russia’s invasion of Ukraine, the United States, along with the European Union, have imposed restrictive sanctions on Russia, Russian entities, and Russian citizens. We are subject to these governmental sanctions and export controls, which may subject us to liability if we are not in full compliance with applicable laws. Further, implementation of new tariff schemes by various governments, such as those implemented by the United States, Canada, and China in recent years, could potentially increase the costs of our materials, increase our cost of production, and ultimately increase the landed cost of our products sold from one country into another country. While these factors or the impact of these factors are difficult to predict, any one or more of these factors could adversely affect our operations.
There has been, and may continue to be, significant volatility in global stock markets and foreign currency exchange rates that could result in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. To the extent that foreign sales are transacted in foreign currencies and we do not enter into currency hedge transactions, we are exposed to risk of losses due to fluctuations in foreign currency exchange rates, particularly for the British Pound, Euro, and Canadian dollar. Significant fluctuations in the value of the currencies of the countries in which we do business could have an adverse effect on our results of operations.
Unanticipated changes in our tax provisions or exposure to additional income tax liabilities could affect our cash flows and financial condition.
Our business operates in many locations under government jurisdictions that impose income taxes. Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting our income tax expense and profitability . On July 4, 2025, the U.S. government enacted the OBBBA, which extended various expiring tax provisions from the Tax Cuts and Jobs Act of 2017 ("TCJA") and introduced a variety of other substantial tax law changes. For Curtiss-Wright, the most significant impact relates to the immediate expensing of research and development expenditures in 2025, reducing total estimated 2025 tax payments. There was no material impact to the Corporation's 2025 effective tax rate. Further, changes in the tax laws of foreign jurisdictions where we operate could arise as a result of the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development ("OECD"). In December 2022, the European Union ("EU") member states reached an agreement to implement the 15% minimum corporate tax component ("Pillar Two") of the OECD’s tax reform initiative with certain aspects effective January 1, 2024, and other aspects effective January 1, 2025. Further, on January 5, 2026, the OECD released a comprehensive package for a “side-by-side arrangement” with respect to Pillar Two global minimum tax rules that includes new administrative guidance. Legislative changes to address Pillar Two are being adopted by taxing authorities in countries where we do business. Based on the Corporation’s assessments, it does not expect Pillar Two to have a material impact on its effective tax rate nor on its consolidated results of operation, financial position, and cash flows.
Furthermore, the amount of income taxes paid by us is subject to examination by U.S. federal, state, and local tax authorities and by non-U.S. tax authorities. We regularly assess the likelihood of an adverse outcome resulting from such examinations to determine the adequacy of our provision for taxes. There can be no assurance as to the outcome of any such examinations. If the ultimate determination of our taxes owed were for an amount in excess of amounts reserved, our operating results, cash flows, and financial condition could be materially and adversely affected.
We use estimates when accounting for contracts that apply over-time revenue recognition. Changes in estimates could affect our profitability and overall financial position.
Accounting for contracts that apply over-time revenue recognition requires judgment relative to assessing risks, estimating contract net sales and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of our contracts, the estimation of total net sales and costs at completion is complicated and subject to many variables. For example, assumptions must be made regarding the length of time to complete the contract, as costs also include expected
increases in wages and prices for materials and allocated fixed costs. Similarly, assumptions must be made regarding the future impact of efficiency initiatives and cost reduction efforts. Incentives, awards, price escalations, liquidateddamages, or penalties related to performance on contracts are considered in estimating revenue and profit rates using either the expected value method or most likely amount method. It is possible that materially different amounts could be obtained, because of the significance of the judgments and estimation processes described above, if different assumptions were used or if the underlying circumstances were to change. Changes in underlying assumptions, circumstances, or estimates may have a material adverse effect upon future period financial reporting and performance. See “Critical Accounting Estimates and Policies” in Part II, Item 7 of this Form 10-K.
Our future financial results could be adversely impacted by asset impairment charges.
As of December 31, 2025, we had goodwill and other intangible assets, net of accumulated amortization, of approximately $2.2 billion, which represented approximately 43% of our total assets. Our goodwill is subject to an impairment test on an annual basis, or more frequently, whenever events and circumstances indicate that goodwill may be impaired. Intangible assets (other than goodwill) are generally amortized over the useful life of such assets. In addition, from time to time, we may acquire or make an investment in a business that will require us to record goodwill based on the difference between the purchase price and the fair value of the acquired assets. We may subsequently experience unforeseen issues with such business that adversely affect the anticipated returns of the business or value of the intangible assets and trigger an evaluation of the recoverability of the recorded goodwill and intangible assets for such business. For example, if the financial performance of such business was to decline significantly, we could incur a material non-cash charge to our income statement for the impairment of goodwill and other intangible assets. Future determinations of significant write-offs of goodwill or intangible assets as a result of an impairment test or any accelerated amortization of other intangible assets could have a material adverse impact on our financial condition and results of operations.
Our current debt, and debt we may incur in the future, could adversely affect our business and financial position.
As of December 31, 2025, we had approximately $1.0 billion of debt outstanding. Our level of debt and debt servicing costs associated with that indebtedness, in part because of increases in interest rates on variable rate indebtedness under our revolving credit facility, could have significant consequences for our business. For example, our indebtedness could require us to use a substantial portion of our cash flows from operations to pay the principal and interest on our debt, thereby reducing funds available for working capital, acquisitions, dividends, capital expenditures, and other investments in our business, including investments in technology and research and development; make us vulnerable to economic downturns and increases in interest rates; limit us from obtaining additional debt; limit our flexibility in planning for, or reacting to, changes in the industries in which we compete; and place us at a competitive disadvantage compared to our competitors, some of whom have lower debt service obligations and greater financial resource than we do. In addition, most of our debt arrangements require us to maintain certain debt and interest coverage ratios and limit our ability to incur debt, make investments or undertake certain other business activities. These requirements could limit our ability to obtain future financing and may prevent us from taking advantage of attractive business opportunities. Our ability to meet the financial covenants or requirements in our debt arrangements may be affected by events beyond our control, and we cannot assure you that we will satisfy such covenants and requirements. A breach of these covenants or our inability to comply with the restrictions could result in an event of default under our debt arrangements which, in turn, could result in an event of default under the terms of our other indebtedness. Upon the occurrence of an event of default under our debt arrangements, after the expiration of any grace periods, our lenders could elect to declare all amounts outstanding under our debt arrangements, together with accrued interest, to be immediately due and payable. If this were to happen, we cannot ensure that our assets would be sufficient to repay in full the payments due under those arrangements or our other indebtedness or that we could find alternative financing to replace that indebtedness.
We self-insure health benefits and may be adversely impacted by unfavorableclaims experience.
We are primarily self-insured for our health benefits. If the number or severity of claims increases, or we are required to accrue or pay additional amounts because the claims prove to be more severe than our original assessment, our operating results would be adversely affected. Our future claims expense might exceed historical levels, which could reduce our earnings. We expect to periodically assess our self-insurance strategy. We are required to periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts. In addition, because we do not carry “stop loss” insurance, a significant increase in the number of claims that we must cover under our self-insurance retainage could adversely affect our profitability.
Increasing costs of certain employee and retiree benefits could adversely affect our financial position, results of operations, or cash flows.
Our earnings may be positively or negatively impacted by the amount of income or expense we record for our pension and other postretirement benefit plans. U.S. GAAP requires that we calculate income or expense for the plans using actuarial valuations. These valuations reflect assumptions relating to financial markets and other economic conditions. Changes in key economic indicators can change the assumptions. The most significant year-end assumptions used to estimate pension or other postretirement benefit expense for the following year are the discount rate, the expected long-term rate of return on plan assets, expected future medical cost inflation, and expected compensation increases. In addition, we are required to make an annual measurement of plan assets and liabilities, which may result in a significant change to equity through a reduction or increase to other comprehensive income. For a discussion regarding how our financial statements can be affected by pension and other postretirement benefit plans accounting policies, see “Management’s Discussion and Analysis—Critical Accounting Estimates and Policies—Pension and Other Postretirement Benefits” in Part II, Item 7 of this Form 10-K. Although U.S. GAAP expense and pension or other postretirement contributions are not directly related, the key economic factors that affect U.S. GAAP expense would also likely affect the amount of cash we would contribute to the pension or other postretirement plans. Potential pension contributions include both mandatory amounts required under federal law, Employee Retirement Income Security Act, and discretionary contributions to improve the plans’ funded status. An obligation to make contributions to pension plans could reduce the cash available for working capital and other corporate uses.
GENERAL RISKS
Our future growth and continued success are dependent upon our key personnel.
Our success in driving business performance and executing our growth strategy is dependent upon the efforts of our senior management personnel and our ability to attract and retain other highly qualified management and technical personnel. Because of the complex nature of many of our products and services, and our focus on technological and product innovations, we are generally dependent on an educated and highly skilled workforce, including our engineering talent and our sales professionals. We strive to attract and hire talented employees, as well as support their growth, development, and engagement. However, we face competition for management and qualified technical personnel from other companies and organizations, which has intensified for a variety of reasons, including wage inflation, sustained labor shortages, and a shift toward remote work. Therefore, we may not be able to retain our existing management and technical personnel or fill new management or technical positions or vacancies created by expansion or turnover at our existing compensation levels. Although we have entered into change of control agreements with some members of senior management, we do not have employment contracts with our key executives. As some of our key executives approach retirement age, we have made a concerted effort to reduce the effect of the loss of our senior management personnel through management succession planning. However, we may be required to devote significant time and resources to identify and integrate key new personnel should key management losses occur earlier than anticipated. The loss of members of our senior management and qualified technical personnel could have a material adverse effect on our business.
Our business, financial condition, and results of operations could be materially adversely affected if the United States were to withdraw from or materially modify certain international trade agreements, or if tariffs or other restrictions on the foreign-sourced goods that we sell were to increase.
A significant portion of our business activities are conducted in foreign countries, including Mexico and Canada. Our business benefits from free trade agreements such as the United States-Mexico-Canada Trade Agreement ("USMCA") and relies on various U.S. corporate tax provisions related to international commerce as we build, market, and sell our products globally. Although there are no immediate effects on our operations with respect to USMCA, we cannot predict future developments in the political climate involving the United States, Mexico and Canada, and thus, these may have an adverse and material impact on our operations and financial growth. The USMCA is subject to renewal in 2026 and the U.S. government has recently indicated that it intends to negotiate changes to the USMCA with the Mexican and Canadian governments. The effects of such negotiations and any changes to the USMCA may negatively impact our operations in Mexico and Canada, and may significantly and materially increase our costs by increasing the cost of shipping products from our facilities in Mexico and in Canada.
The United States and other countries have levied tariffs and taxes on certain goods, such as those implemented by the United States, Canada, and China in recent years. Some of our products are included in these tariffs. The imposition of new or increased tariffs, duties, border adjustment taxes, or other trade restrictions by the United States could also result in the adoption of new or increased tariffs or other trade restrictions by other countries. The tariffs may in the future increase our cost of materials and may cause us to increase prices to our customers, which we believe may reduce demand for our products in the U.S. and abroad. Media and political reactions in the affected countries could potentially exacerbate the impact on our operations in those countries. Our price increases may not be sufficient to fully offset the impact of the tariffs, and result in lowering our margin on products sold. If the U.S. government increases or implements additional tariffs, or if additional tariffs
or trade restrictions are implemented by other countries, the resulting trade barriers could have a significant adverse impact on our suppliers, our customers and on our business. We are not able to predict future trade policy of the U.S. or of any foreign countries in which we operate or purchase goods, or the terms of any renegotiated trade agreements, or their impact on our business.
Global economic conditions may adversely affect our business, operating results and financial condition.
Historically, we have not been significantly impacted by inflation, with increases in raw material costs or payroll costs generally offset through lean manufacturing activities or pricing initiatives. However, in recent history, we have experienced heightened pressures in our costs of material, services, and especially labor, consistent with the overall high rates of inflation. We have consistently focused on mitigating inflation through pricing and operational excellence initiatives, and generally have been able to offset these cost increases, as a portion of our contracts contain terms and conditions that enable us to pass inflationary price increases to our customers. In those cases whereby inflationary increases are not contractually stipulated, we aim to actively negotiate price increases. We have consistently made annual investments in capital that deliver efficiencies and cost savings, while continuing to focus on negotiating better contract terms, especially on long-term agreements. While the historical benefits of these efforts have generally offset the margin impact of competitive pricing conditions in the markets that we serve, there are no assurances that higher prices can effectively be passed through to our customers or that we will be able to fully offset the effects of higher costs through price increases on a timely basis.
Although we have significant discretionary funding capacity through our generation of significant operating cash flows coupled with access to the credit markets, our ability to fund our operations could be negatively impacted by the following factors: (a) global macroeconomic uncertainty, (b) the ongoing trade disputes between the United States, Canada, and China, (c) armed conflicts around the world, such as those in Ukraine, (d) any conflict or threatenedconflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), (e) any prolonged future U.S. government shutdown, (f) inflationary pressures, (g) rising interest rates, (h) labor shortages, (i) global supply chain disruptions, and (j) uncertainty regarding the stability of global credit and financial markets. In addition, certain of our customers and suppliers could be affected directly by an economic downturn and could face credit issues or cash flow problems that could give rise to payment delays, increased credit risk, bankruptcies, and other financial har dships, which could impact customer demand for our products as well as our ability to manage normal commercial relationships with our customers and suppliers. Depending on their severity and duration, the effects and consequences of a global economic downturn could have an adverse impact on our results of operations and financial condition.
A percentage of our workforce is employed under collective bargaining agreements.
Approximately 6% of our workforce is employed under collective bargaining agreements, which from time to time are subject to renewal and negotiation. We cannot ensure that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor, including healthcare, pensions, or other benefits, or that a breakdown in such negotiations will not result in the disruption of our operations, including by way of strikes or work stoppages. Although we have generally enjoyedgood relations with both our unionized and non-unionized employees, we may experience an adverse impact on our operating results if we are subject to labor actions.
Future terror attacks, war (including the Russia-Ukraine war), natural disasters, climate change-related events, or other events beyond our control could adversely impact our businesses.
Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseeninterruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war (including the Russia-Ukraine war), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, or other events such as strikes by the workforce of a significant customer or supplier (e.g., the International Association of Machinists and Aerospace workers union work stoppages at Boeing). Several of our facilities, because of their locations, could be subject to catastrophicloss caused by the above-mentioned natural disasters. G lobal climate change may aggravate natural disasters and increase severe weather events that affect our business operations. These risks could negatively impact demand for or supply of our products and could also cause disruption to our facilities or systems, which could also interrupt operational processes and adversely impact our ability to manufacture our products and provide services and support to our customers. The insurance we maintain may be insufficient to cover our losses, and any incidents may result in loss of, or increased costs of, such insurance. In addition, while our existing disaster recovery and business continuity plans, including those relating to our information technology systems are well designed, they may not be fully responsive to, or minimize losses associated with, catastrophic events. As a result, any business disruption could negatively affect our business, operating results, or financial condition.
Pandemics, epidemics or other public health emergencies, such as the outbreak of COVID-19 may adversely impact our business, operations, and financial results.
A pandemic, including COVID-19 or other epidemic or public health emergency, together with preventative measures taken to contain or mitigate such crises, could impact our business, operations and financial condition in a variety of ways, such as: (i.) impact our customers such that the demand for our products and services could change; (ii.) disrupt our supply chain and impact the ability of our suppliers to provide products or services as required; (iii.) disrupt our ability to sell and provide our products and services and otherwise operate effectively; (iv.) increase incremental costs resulting from the adoption of preventative measures and compliance with regulatory requirements; (v.) create financial hardship on customers, including by creating restrictions on their ability to pay for our products and services; and (vi.) result in closures of our facilities or the facilities of our customers or suppliers. Even after a public health crisis subsides, there may be long-term effects on our business practices and customers in economies in which we operate that could severelydisrupt our operations and could have a material adverse effect on our business, operations, and financial results. As we cannot predict the duration, scope or severity of future public health crises, the negative financial impact to our results cannot be reasonably estimated and could be material.
Curtiss-Wright’s end market strategy is to grow leading market positions through the development of highly engineered products and services to deliver long-term profitable growth. We are well positioned on high performance platforms and benefit
from decades of engineering expertise and knowledge transfer. We are committed to investing in technologies and aligning our core competencies with new applications and evolving market trends.
The Company’s global portfolio spans across the defense, commercial aerospace, commercial nuclear power & process, and general industrial markets. Our end market diversification provides opportunities to drive growth in new products and markets through ongoing innovation and collaboration across the portfolio. It also helps mitigate the impact of volatility caused by industry and economic cycles.
Economic Factors Impacting Our Markets
Many of Curtiss-Wright’s commercial businesses are driven in large part by global economic growth, primarily led by operations in the U.S., Canada, Europe, and China, and as measured by real gross domestic product ("GDP"). Our major geographical markets have seen economic growth rates weaken considerably over the past few years, due in large part to heightened macro uncertainty including rising inflation and the implementation of tariffs. In 2024, U.S. and Global GDP both grew 2.8%. In 2025, U.S. GDP is expected to grow approximately 2.2% according to various forecasts, despite a slightly less impactful headwind of rising inflation resulting from interest rate reductions. In 2026, based on a range of forecasts, growth in the U.S. economy is expected to slightly exceed 2025 levels despite continued economic uncertainty, as economists expect the U.S. Federal Reserve to implement further easing on interest rates to control inflation.
In the global environment, which is influenced by international trade, economic conditions, as well as geopolitical and tariff uncertainty, global GDP is expected to grow approximately 2.9% in 2025, decrease to 2.7% in 2026, and remain well below 3% for the foreseeable future.
Defense
Curtiss-Wright maintains a strong presence across the naval, aerospace, and ground defense markets, which collectively represent approximately 58% of our annual net sales. Curtiss Wright provides vast platform and program diversity, where we support over 400 platforms and 3,000 programs worldwide. Our portfolio of products and services supports critical high-performance programs and platforms serving all branches of the U.S. military, in addition to a strong and growing international defense presence. The most significant portion of our defense revenues is comprised of long-term programs and primarily fixed-price contracts driven mainly by U.S. DoW budgets and funding levels. We have strong alignment to U.S. military priorities and long-term visibility on high priority platforms, most particularly shipbuilding. As a supplier of COTS and COTS+ solutions, we continue to demonstrate that defense electronics technology will enhance our ability to design and develop future generations of advanced systems and products for high performance applications.
Curtiss-Wright is well-positioned to grow in strong U.S. defense budget environments. In more challenging budget years, or those impacted by funding delays, the Company is well-insulated from specific program funding decisions due to the breadth of our portfolio, which consists of unique, sole-source positions and larger, multi-year opportunities that provide continued stability. We also endeavor to capitalize on work typically outsourced from defense primes when budgets are more fiscally restrained. As a result, the Company has historically demonstrated solid growth in this market, particularly when including acquisitions, and has exceeded the average growth rate of the base U.S. defense budget over the past 20 years through various cycles and administrations. Our performance is supported by a strong backlog, especially in naval defense.
In the naval defense market, we expect continued funding for U.S. shipbuilding programs, which have received strong bipartisan support from Congress, in addition to supplemental maritime industrial base funding to support facility expansion and technology modernization initiatives. Of note, we are recognizing significant production revenues on the Ford class aircraft carrier, Columbia class and Virginia class submarines, and numerous surface ship platforms, as well as development revenues on the future generation SSN(X) submarine. We have a long legacy of providing products that support nuclear propulsion systems on naval vessels. In addition, through our service centers, we are a provider of ship repair and maintenance for the U.S. Navy’s Atlantic and Pacific fleets. In the aerospace defense market, we expect to benefit from increased funding levels supporting the global market for manned and unmanned military aircraft, particularly Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance, and Reconnaissance ("C5ISR"), electronic warfare, encryption, unmanned systems, and communications programs. We also design and manufacture high-technology data acquisition and comprehensive flight test instrumentation systems, as well as critical aircraft arresting systems equipment. In the ground defense market, we are a supplier of advanced tactical communications solutions for battlefield network management, including COTS-based rugged, small form factor communications systems and integrated network communications management software. We are also well positioned with our electronics stabilization systems equipment supporting ground combat and tactical vehicles, particularly in the international ground defense market. Through continued innovation as well as incremental research and development
investments, Curtiss-Wright maintains strong alignment with numerous high growth U.S. military priorities, modernization efforts and emerging technological trends, including security, cyber, hypersonics, and the net-centric connected battlefield. In addition, as a leading supplier of MOSA-based solutions, Curtiss-Wright remains well aligned with the best-in-class open standards-based architectures within the industry, and the critical mandates supporting major defense acquisition programs.
The U.S. government began its FY2025 fiscal year on October 1, 2024 under a continuing resolution ("CR"), which eventually led to a historic full-year CR with a base budget of approximately $840 billion, up slightly year-over-year, and a fully discretionary budget of approximately $895 billion. In addition to the longest shutdown in modern history, the government began its FY2026 fiscal year on October 1, 2025 under a CR to allow for more time to negotiate a full-year funding deal. The FY2026 Defense Appropriations Act was officially passed in February 2026, with base levels consistent with FY25 budget funding. In addition, the President’s FY2026 Budget Request included $150 billion in overall funding approved by Congress under the OBBBA, $113 billion of which is anticipated to support FY2026. This funding has the potential to drive more than 13% topline growth over the FY2025 enacted budget to a discretionary defense budget approaching $1 trillion. Key priorities include naval shipbuilding, with a focus on improving the maritime industrial base, tactical battlefield communications and networking, vehicle modernization, tactical aircraft modernization, and Golden Dome, all of which are anticipated to receive strong funding and provide numerous growth opportunities for Curtiss-Wright in 2026 and beyond.
Looking ahead, the DoW has yet to release a future year defense plan ("FYDP") through FY30, which is typically meant to cover longer-term spending priorities aimed at improving the defense industrial base and national security, modernization, and countering China as the “pacing challenge” in the global environment. However, there have been initial discussions about additional reconciliation funding for FY27.
We also see continued strong growth in non-U.S. military spending, supported by a renewed, global focus from NATO and allied countries in light of Russia’s invasion of Ukraine, as well as the continued threat from China. NATO’s Secretary outlined a ten-year commitment to ramp up NATO allies’ investment to 5.0% of GDP per year on defense (previously 2.0%), with a goal to reach 3.5% of GDP spent on core (or hard) military spending and 1.5% of GDP for critical infrastructure, cybersecurity, and other defense measures. Today, Curtiss-Wright’s total direct foreign military sales represent approximately 10% of the Corporation’s total revenues. International markets also represent a growing portion of overall sales for defense prime contractors, creating additional growth opportunities for Curtiss-Wright.
Commercial Aerospace
Curtiss-Wright derives revenue from the global commercial aerospace market, principally to the commercial jet market, and to a lesser extent the regional jet, business jet, and commercial helicopter markets. Our primary focus is OEM products and services for commercial jets, which represent approximately 90% of our sales in this market and are highly dependent on new aircraft production from our primary customers, Boeing and Airbus. We have significant content on the majority of the commercial aircraft programs, where our business is more leveraged to narrowbody (~60%) than widebody (~40%) commercial aircraft. We provide critical equipment supporting these platforms, including actuation, high-temperature and high accuracy sensors, flight controls, and other sophisticated electronics, as well as surface treatment services such as shot and laser peening, and specialty coatings utilized on highly stressed components of turbine engine fan blades and aircraft structures. Curtiss-Wright’s exposure continues to grow on Airbus platforms as we expand the reach of our electromechanical actuation business and pursue opportunities to provide high temperature sensors used in the hottest sections of the engine. Additionally, the Company has expanded its offering of flight data recorder technology to support the FAA's 25-hour safety mandates.
Despite economic uncertainty, global air travel reached record levels in 2025 and has steadily grown since the 2020 pandemic. The key drivers in the commercial aerospace market are passenger travel and freight logistics, along with the demand for and delivery of new aircraft to replace the existing, aging fleet. The prolonged production up-cycle experienced in the prior decade was driven by increases in production by Boeing and Airbus on both legacy and new aircraft, particularly narrow-body aircraft. Additionally, sustained low oil prices contributed to declining fuel prices, which in turn led to cheaper airfares for consumers and increased passenger growth.
While we closely monitor these industry metrics, our success and future growth in the commercial aerospace market is primarily tied to the anticipated growth in aircraft production rates (e.g., Boeing 737 and 787, Airbus A320 and A350), the timing of our order placement, continued partnering with aerospace OEMs on both the current fleet and the next-generation of single aisle programs and engines, and emerging opportunities to support more fuel efficient and all-electric aircraft. Overall, we expect the secular trends of electrification and decarbonization, along with tremendous customer backlog, to support a long-term ramp up in commercial aerospace production.
Commercial Nuclear Power & Process
In the power market, Curtiss-Wright is a global supplier of nuclear reactor technologies. We derive sales from the commercial nuclear power generation market, whereby we supply a variety of highly engineered products and services, including reactor coolant pumps, control rod drive mechanisms, valves, motors, spent fuel management, containment doors, bolting solutions, enterprise resource planning, plant process controls, and coating services. We provide equipment and services to both the aftermarket and new build markets, and are aligned globally to support the entire commercial nuclear lifecycle. Today, we have content on every reactor operating in the U.S., Canada, and U.K., along with significant exposure within South Korea. Curtiss-Wright also plays a significant role in the new build market supporting the Generation III+ Westinghouse AP1000 reactor. Additionally, we are executing initiatives to leverage our capabilities into the broader conventional power generation market, capitalizing on advances in digital instrumentation and control systems, as well as next-generation SMRs and Advanced Reactor designs.
There are a number of global forces driving a resurgence in nuclear power, as it continues to become more widely accepted as a critical source to meet rising future energy demand and decarbonization commitments through the creation of clean, reliable, and affordable energy, and more recently through its potential to meet surging data-center power demand driven by AI. Within the U.S., nuclear power continues to benefit from both strong public and bipartisan government support. In May 2025, the President signed a series of Executive Orders ("EOs") titled "Reinvigorating the Nuclear Industrial Base," which focused on the importance of commercial nuclear to U.S. national security, as well as the country’s leadership in global nuclear power development and AI. Among the many highlights, these EOs are focused on stimulating growth in the industry by quadrupling U.S. nuclear capacity by 2050 from 100 gigawatts ("GW") to 400 GW; reforming and modernizing NRC regulations to promote faster licensing; prioritizing the DOE to work with the nuclear energy industry to facilitate 5 GW of power uprates to existing nuclear reactors; restarting stalled projects and half-built reactors; accelerating the deployment of advanced nuclear technologies; and supporting the construction of 10 new large reactors by 2030. In October 2025, U.S. new reactor construction was further supported by the U.S. government’s announcement that it entered into a strategic partnership to provide at least $80 billion to support the construction of new Westinghouse nuclear reactors and reinvigorate the nuclear power industrial base. Outside of the U.S., following the Russian invasion of Ukraine and the disruption that it caused to European energy markets, nuclear power is being viewed as a pathway towards energy independence and an opportunity for European economies to break free from Russian natural gas and oil.
According to the NRC, nuclear power comprises approximately 20% of all electric power produced in the U.S. today, with 94 reactors (including both Vogtle 3 and 4 AP1000 reactors) operating across 56 nuclear power plants in 28 states. Our growth opportunities for aftermarket products and services are driven by plant aging, plant closures, plant starts, requirements for planned outages, plant life extensions (from the end of their original 40-year operating lives to 60-year and now 80-year lives via subsequent license renewals), the levying of regulatory requirements, suppliers abandoning the commercial nuclear market, and plants seeking technology and innovationadvances, such as digitalization, that further enable plant modernization.
The U.S. market continues to experience strong bipartisan support for nuclear power, with previous significant investments through the Civil Nuclear Credit Program (part of the Infrastructure Bill) and nuclear power production tax credits (provided by the Inflation Reduction Act), and, more recently, through proposed nuclear reactor restarts focused on helping to preserve and expand the existing U.S. reactor fleet. As a result, we have experienced and continue to expect increased opportunities for our vast portfolio of advanced nuclear technologies to aid safety, extend the reliability, and ensure the ongoing viability of U.S. nuclear plants. We also continue to expand Curtiss-Wright’s presence in Government Nuclear by providing equipment, systems, and construction products, such as safety-related control systems and plant performance and monitoring equipment, to key customers, including the Idaho National Laboratory and other government sites. Outside of the U.S. market, as international plants age, we foresee numerous opportunities to help solve operators’ needs to prevent obsolescence through plant safety and technology upgrades, plant life extensions, and upgrades of computer systems, and we continue to grow our relationships throughout Canada, Europe, and South Korea, among others.
In the new build market, we also play a significant role supporting the Westinghouse AP1000 reactor, for which we are a supplier of reactor coolant pumps, as well as a variety of ancillary plant products and services. On a global basis, nuclear plant construction remains active. According to the World Nuclear Association, there are more than 70 new reactors under construction in 15 countries, with nearly 120 additional reactors planned and more than 300 others proposed over the next several decades. We continue to expect to play a role in new build nuclear plant construction, and remain aligned with Westinghouse in their pursuits. Curtiss-Wright's growth in the new build market will be driven by new AP1000 orders, with the potential for 20 to 25 reactors to be built in Central and Eastern Europe, along with at least 10 reactors proposed to be built in the United States. This presents a tremendousopportunity to drive Curtiss Wright's long-term growth, as Poland, Bulgaria, and the U.S. are expected to begin construction of new plants before the end of the decade.
Backed by strong funding and legislative support, the U.S. Department of Energy previously allocated $3.2 billion for advanced nuclear reactors through its Advanced Reactor Demonstration Program ("ARDP") to accelerate the development and demonstration of SMRs and advanced reactors through cost-shared partnerships with U.S. industry. The nuclear industry is also benefiting from an influx of investment from major technology companies including Amazon, Microsoft and Google to support electricity production to power data centers. We continue to grow our exposure in this market and are actively engaged with all major 300MW+ reactor designers to develop partnerships and secure content for the design and development of critical systems and equipment expected to be deployed globally. According to a 2022 Nuclear Energy Institute ("NEI") survey, its member utilities see a role for more than 90 gigawatts of nuclear power in support of their decarbonization goals, which translates to the potential for 300 new SMRs by 2050, and represents only a fraction of the potential global demand for these technologies. We anticipate SMR design and development will begin to shift to prototypes as soon as 2026 and transition to initial production orders by the end of this decade before reaching a steady-state of production by the middle of the next decade, providing a tremendous long-term growth opportunity.
In the process market, we derive revenue from the oil and gas, chemical, and petrochemical industries through severe-service pump and valve products, and surface treatment services, in which the majority of our sales are to the downstream markets. Sales in these industries are driven by global supply and demand, crude oil prices, industry regulations, and the natural gas market, with growth rates in this market closely linked to global GDP. We maintain a global maintenance, repair, and overhaul (MRO) business for our operation-critical, pressure-relief valve technologies as refineries opportunistically service or upgrade equipment that has been operating at or near full capacity. Following the pandemic, oil prices generally stabilized, spurring both increased MRO spending and turnaround activity particularly for industrial valves and some CapEx-driven project opportunities, as oil & gas companies reinvested to meet rising demand and depleted reserves. Despite some initial disruption at the start of the Ukrainian/Russian war, global supply generally stabilized, as industry worked to preserve and increase capacity for non-Russian alternatives. Within the past year, geopolitical tensions and tariffs have led to reduced production and capital spending. Over the long run, we believe improved economic conditions and continued global expansion will be key drivers for future growth of our severe service and operation-critical valves serving the process industry.
Aside from our traditional valves offering, the Company is also advancing several subsea pumping development initiatives, working with industry leaders to meet the growing demand for more reliable pumping systems in deep sea drilling and off-shore production facilities. We have leveraged our legacy expertise in naval defense pump technology to crossover into this adjacent market and anticipate significant production orders to begin materializing by the middle of the next decade.
General Industrial
We derive revenue from our widely diversified offering to the general industrial market, which primarily consists of electronic sensors and control systems, electro-mechanical actuation, and surface treatment services. We supply our products and services to numerous OEMs and aftermarket industrial customers, including the transportation, commercial trucking, off-road equipment, agriculture, construction, material handling and automotive industries, which lowers the risk associated with any specific headwinds or economic cycles across the various markets in which we compete. Our growth in these markets is typically aligned with changes in global GDP rates and industrial production, with the majority of our sales driven by customers in North America and Europe.
We have developed long-standing relationships with our customers and provide technologies that promote efficiency, safety, reduced emissions, and longevity. One of the key drivers within our general industrial market is our focus on electronification and electrification, where our electronic sensors and controls systems products serve the on-and-off highway, medical mobility, and specialty vehicles markets. Notable products include electronic throttle controls, shift controls, joysticks, power management systems and power electronics, charge switching units and traction inverter systems, enabling us to provide a full suite of in-cab operator control systems to our customers. Increased industry demand for electronic control systems and sensors has been fueled by the need for improved operational efficiency, safety, repeatability, enhanced functionality and connectivity, and reduced emissions with greater fuel efficiencies to customers worldwide. Key to our future growth is expanding the human-machine interface ("HMI") technology portfolio and providing a complete system solution to our customers. Existing and emerging trends in commercial vehicle safety, emissions control, and improved driver efficiency are propelling commercial vehicle OEMs toward higher performance subsystems. These trends are accelerating the evolution from discrete HMI components towards a more integrated vehicle interface architecture. Growth opportunities also exist with a range of intelligent actuators for factory automation and robotics and digitalization, which help our customers quickly leverage data and utilize analytics within the Internet of Things environment, while also driving improvedefficiency of plant operations. Meanwhile, our surface treatment services, which include shot and laser peening, engineered coatings, and analytical testing services across an extensive global network, are used to increase the safety, reliability, and longevity of components operating in harsh environments. Sales are primarily driven by global demand from general industrial customers.
In the long term, the global drive towards electrification and electronification, potential government regulations for emissions, investment in clean energy technologies, and advancements in robotics and automation, along with consistent new product introductions and market penetration will provide steady growth opportunities for Curtiss-Wright’s technologies serving this market.
RESULTS OF OPERATIONS
The following MD&A is intended to help the reader understand the results of operations and financial condition of the Corporation for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Discussion and analysis of our financial condition and results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, is contained in our 2024 Annual Report on Form 10-K, filed with the SEC on February 13, 2025.
Analytical Definitions
Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact that acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. The definition of “organic” excludes the effects of costs associated with our 2024 Restructuring Program and foreign currency translation.
Year Ended December 31,
Percent
change
(In thousands, except percentages)
Sales:
Aerospace & Industrial
Defense Electronics
Naval & Power
Total sales
Operating income:
Aerospace & Industrial
Defense Electronics
Naval & Power
Corporate and eliminations
Total operating income
Interest expense
Other income, net
Earnings before income taxes
Provision for income taxes
Net earnings
New orders
Backlog
Components of sales and operating income growth (decrease):
Sales
Operating
Income
Organic
Acquisitions
Restructuring
Foreign currency
Total
Sales for the year increased $377 million, or 12%, to $3,498 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $44 million, $108 million, and $225 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.
Operating income for the year increased $105 million, or 20%, to $634 million, and operating margin increased 120 basis points compared with 2024. In the Aerospace & Industrial segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, the benefits of the Company's restructuring initiatives, and favorable foreign currency translation, partially offset by favorable mix . Operating income and operating margin in the Defense Electronics segment increased due to favorable absorption on higher sales, the benefits from both our operational excellence and restructuring initiatives, and favorable mix on defense electronics products. In the Naval & Power segment, operating income increased primarily due to favorable overhead absorption on higher sales, while operating margin was negatively impacted primarily by first year purchase accounting costs associated with our acquisition of I&C Solutions and unfavorable mix.
Non-segment operating expense for the year decreased $2 million, or 4%, to $42 million, primarily due to lower corporate costs in the current period.
Interest expense for the year decreased $2 million, or 4% , to $43 million, primarily due to the repayment of our $90 million 3.85% Senior Notes in February 2025.
Other income, net for the year decreased $9 million, or 23% , to $30 million, primarily due to lower interest income and higher overall pension costs in the current period.
The effective tax rate of 21.9% for the year ended December 31, 2025, decreased as compared to an effective tax rate of 22.4% in the prior year period, primarily due to tax benefits associated with our legal entity restructuring in the prior year period.
New orders increased $357 million, or 10% , from the prior year period to $4,054 million, primarily due to the timing of naval defense orders as well as an increase in orders for commercial nuclear products in the Naval & Power segment. New orders also benefited from an increase in orders in the Aerospace & Industrial segment for sensors and electromechanical ("EM") actuation products within our A&D markets as we ll as general industrial products. Th ese increases were partially offset by the timing of orders for aerospace and ground defense equipment in the Defense Electronics segment, including embedded computing and tactical communications products. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.
Comprehensive income (loss)
Pension and postretirement adjustments within comprehensive income during the year ended December 31, 2025 were a $1 million gain, compared to a $14 million gain for the prior year period. The gain in the current period was primarily attributed to higher asset returns. The gain in the prior period was primarily attributed to increases in the discount rate.
Foreign currency translation adjustments during the year ended December 31, 2025 resulted in a comprehensive gain of $68 million, compared to a comprehensive loss of $44 million in the comparable prior period. The comprehensive gain in the current period was primarily attributed to increases in th e British Pound and Canadian Dollar, while the comprehensive loss in the prior year period was primarily attributed to decreases in the British Pound and Canadian Dollar.
RESULTS BY BUSINESS SEGMENT
Aerospace & Industrial
Sales in the Aerospace & Industrial segment are primarily generated from the commercial aerospace and general industrial markets and, to a lesser extent, the defense markets.
The following tables summarize sales, operating income and margin, new orders, and backlog within the Aerospace & Industrial segment.
Year Ended December 31,
Percent Change
(In thousands, except percentages)
Sales
Operating income
Operating margin
bps
New orders
Backlog
Components of sales and operating income growth (decrease):
Sales
Operating
Income
Organic
Restructuring
Foreign currency
Total
Sales increased $44 million, or 5%, to $977 million, from the comparable prior year period. In the commercial aerospace market, sales increased $34 million primarily due to higher demand for sensors products and surface treatment services on various narrow-body and wide-body platforms. Sales in the ground defense market increased $16 million primarily due to higher sales of EM actuation equipment. In the aerospace defense market, sales increased $8 million primarily due to higher demand for actuation equipment and surface treatment services on various domestic and international fighter jet programs. These increases were partially offset by lower sales of industrial vehicle products to off-highway vehicle platforms in the general industrial market.
Operating income increased $18 million, or 12%, to $166 million from the comparable prior year period, and operating margin increased 110 basis points to 17.0%, primarily due to favorable overhead absorption on higher sales, the benefits of the Company's restructuring initiatives, and favorable foreign currency translation, partially offset by unfavorable mix.
New orders increased $57 million as compared to the prior year, primarily due to an increase in orders for sensors and EM actuation products within our A&D markets as well as increase in orders for general industrial products.
Defense Electronics
Sales in the Defense Electronics segment are primarily to the defense markets and, to a lesser extent, the commercial aerospace market.
The following tables summarize sales, operating income and margin, new orders, and backlog within the Defense Electronics segment.
Year Ended December 31,
Percent Change
(In thousands, except percentages)
Sales
Operating income
Operating margin
bps
New orders
Backlog
Components of sales and operating income growth (decrease):
Sales
Operating
Income
Organic
Restructuring
Foreign currency
Total
Sales increased $108 million, or 12%, to $1,019 million, from the comparable prior year period. In the ground defense market, s ales increased $38 million primarily due to the timing of domestic sales of embedded computing equipment. Sales in the aerospace defense market increased $35 million primarily due to higher sales of embedded computing equipment on various international programs as well as domestic unmanned aerial vehicle programs. In the naval defense market, sales benefited $17 million primarily due to higher sales of embedded computing equipment supporting various domestic and international programs. Sales in the commercial aerospace market increased $16 million primarily due to higher sales of our flight data recorder and avionics technology to OEM customers.
Operating income increased $53 million , or 24% , to $278 million compared with the same period in 2024, and operating margin increased 260 basis points to 27.3%, primarily due to favorable absorption on higher sales, the benefits from both our operational excellence and restructuring initiatives, and favorable mix on defense electronics products. These increases were partially offset by higher investment in research and development.
New orders decreased $82 million as compared to the prior year, primarily due to the timing of orders on aerospace and ground defense equipment, including embedded computing and tactical communications products.
Naval & Power
Sales in the Naval & Power segment are primarily to the naval defense and power & process markets, and, to a lesser extent, the aerospace defense market.
The following tables summarize sales, operating income and margin, new orders, and backlog within the Naval & Power segment.
Year Ended December 31,
Percent Change
(In thousands, except percentages)
Sales
Operating income
Operating margin
bps)
New orders
Backlog
Components of sales and operating income growth (decrease):
Sales
Operating
Income
Organic
Acquisitions
Foreign currency
Total
Sales increased $225 million, or 18%, to $1,503 million, from the comparable prior year period. In the naval defense market, sales increased $106 million primarily due to higher demand and the timing of production on the Columbia-class and Virginia-class submarine programs, as well as higher sales of aftermarket fleet services. Sales in the power & process market increased $99 million primarily due to the incremental impact from our I&C Solutions acquisition as well as higher organic sales of commercial nuclear products supporting the maintenance of existing operating reactors and the development of next-generation advanced reactors. In the aerospace defense market, sales increased $12 million primarily due to higher sales of arresting systems equipment supporting various international customers.
Operating income increased $32 million, or 16%, to $231 million, primarily due to favorable overhead absorption on higher sales as well as the benefits from our operational excellence initiatives. These increases were partially offset by higher investment in research and development. O perating margin decreased 20 basis points from the prior year period to 15.4%, primarily due to first year purchase accounting costs associated with our acquisition of I&C Solutions, unfavorable product mix, and higher investment in research and development in the current period.
New orders increased $383 million as compared to the prior year, primarily due to the timing of naval defense orders as well as an increase in orders for commercial nuclear products.
SUPPLEMENTARY INFORMATION
The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our consolidated operating results.
Net Sales by End Market and Customer Type
Year Ended December 31,
Percent change
(In thousands, except percentages)
Aerospace & Defense markets:
Aerospace Defense
Ground Defense
Naval Defense
Commercial Aerospace
Total Aerospace & Defense
Commercial markets:
Power & Process
General Industrial
Total Commercial
Total Curtiss-Wright
Aerospace & Defense Markets
Sales increased $281 million, or 13%, to $2,451 million, as compared to the prior year period, primarily due to higher sales across all markets. Sales in the aerospace defense market increased primarily due to higher sales of embedded computing and arresting systems equipment supporting various international customers, as well as higher demand for actuation equipment and surface treatment services on various domestic and international fighter jet programs . Sales in the ground defense market increased primarily due to higher sales of EM actuation equipment as well as embedded computing equipment. Sales increases in the naval defense market were primarily due to higher demand as well as the timing of production on the Columbia-class and Virginia-class submarine programs as well as higher sales of aftermarket fleet services. Sales in the naval defense market also increased due to higher sales of embedded computing equipment supporting various domestic and international programs. Sales in the com mercial aerospace market primarily benefited from higher demand for sensors products and surface treatment services on various narrow-body and wide-body platforms as well as higher sales of our flight data recorder and avionics technology to OEM customers.
Commercial Markets
Commercial sales increased $96 million, or 10%, to $1,047 million. Sales in the power & process market increased primarily due to the incremental impact from our I&C Solutions acquisition, as well as higher organic sales of commercial nuclear products supporting the maintenance of existing operating reactors and the development of next-generation advanced reactors. Sales in the general industrial market were essentially flat.
Liquidity and Capital Resources
Sources and Uses 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.
Consolidated Statement of Cash Flows
Year ended December 31,
(In thousands)
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Effect of exchange rates
Net decrease in cash and cash equivalents
Operating Activities
Cash provided by operating activities increased $99 million to $643 million from the comparable prior year period , primarily due to higher net earnings.
Investing Activities
Capital Expenditures
Our capital expenditures were $90 million and $61 million for 2025 and 2024, respectively, with the increase primarily due to higher capital spending in the Aerospace & Industrial and Naval & Power segments during the current period.
Divestitures
No material divestitures took place during 2025 or 2024.
Acquisitions
In 2025, we did not complete any acquisitions. In 2024, we acquired two businesses for $235 million, inclusive of purchase price adjustments recorded in the current period.
Future acquisitions will depend, in part, on the availability of financial resources at a cost of capital that meet our stringent criteria. As such, future acquisitions, if any, may be funded through the use of our cash and cash equivalents, through additional financing available under the credit agreement, or through new financing alternatives.
Financing Activities
Debt Issuances and Repayments
In February 2025, we repaid $90 million of the 2013 Notes that matured on February 26, 2025.
Revolving Credit Agreement
As of December 31, 2025, we had no borrowings outstanding under the Credit Agreement and $25 million in letters of credit supported by the credit facility. The unused credit available under the Credit Agreement as of December 31, 2025 was $725 million, which could be borrowed in full without violating any of our debt covenants. As of December 31, 2024, we had no borrowings outstanding under the Credit Agreement.
Repurchase of Common Stock
During 2025, the Company repurchased approximately 934,000 shares of its common stock for $465 million. In 2024, the Company repurchased approximately 766,000 shares of its common stock for $250 million.
Dividends
The Company made dividend payments of $35 million and $32 million in 2025 and 2024, respectively.
Capital Resources
Cash in U.S. and Foreign Jurisdictions
As of December 31,
(In thousands)
United States of America
United Kingdom
Canada
European Union
China
Other foreign countries
Total cash and cash equivalents
C ash and cash equivalents as of December 31, 2025 and December 31, 2024 were $371 million and $385 million, respectively. The decrease in cash held by U.S. subsidiaries during 2025 as compared to 2024 was primarily due to the repayment of the $90 million 2013 Notes as well as higher stock repurchase activity during the current period. The increase in cash held by foreign subsidiaries during 2025 as compared to 2024 was primarily due to lower foreign cash repatriation during the current period. There are no legal or economic restrictions on the ability of any of our subsidiaries to transfer funds, absent certain regulatory approvals in China, w here approximately $26 million of our foreign cash resides.
Cash Utilization
Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends, to determine the most beneficial use of available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.
Debt Compliance
As of December 31, 2025, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization ratio limit of 60%. As of December 31, 2025, we had the ability to incur total additional indebtedness of $2.7 billion without violating our debt to capitalization covenant.
Future Commitments
Cash generated from operations should be adequate to meet our planned capital expenditures of approximately $110 million to $120 million and expected dividend payments of approximately $37 million in 2026. There can be no assurance, however, that we will continue to generate cash from operations at the current level, or that these projections will remain constant throughout 2026. If cash generated from operations is not sufficient to support these operating requirements and investing activities, we may be required to reduce capital expenditures, borrow from our existing credit line, refinance a portion of our existing debt, or obtain additional financing. While all companies are subject to economic risk, we believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.
The following table quantifies our significant future contractual obligations and commercial commitments as of December 31, 2025:
(In thousands)
Total
Thereafter
Debt Principal Repayments
Operating Leases
Interest Payments on Fixed Rate Debt
Total
We enter into standby letters of credit agreements and guarantees with financial institutions and customers primarily relating to future performance on certain contracts to provide products and services and to secure advance payments we have received from certain international customers. As of December 31, 2025, we had contingent liabilities on outstanding letters of credit due as follows:
(In thousands)
Total
Thereafter
Letters of Credit (1)
(1) Amounts exclude bank guarantees of approximately $12 million.
Critical Accounting Estimates and Policies
Our consolidated financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing consolidated financial 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. We believe that the following are some of the more critical judgment areas in the application of our accounting policies that affect our financial condition and results of operations:
Revenue Recognition
We account for revenues in accordance with ASC 606, Revenue from Contracts with Customers . Under ASC 606, revenue is recognized when control of a promised good and/or service is transferred to a customer at a transaction price that reflects the consideration that we expect to be entitled to in exchange for that good and/or service. The unit of account is a performance obligation whereby a contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when the respective performance obligation is satisfied. In certain instances, the transaction price may include estimated amounts of variable consideration including but not limited to incentives, awards, price escalations, liquidateddamages, and penalties, only to the extent that it is probable that a significant reversal of cumulative revenue recognized to date around such variable consideration will not occur. We estimate variable consideration to be included in the transaction price using either the expected value method or most likely amount method. Variable consideration associated with our respective arrangements is not typically constrained.
Performance obligations are satisfied either at a point-in-time or on an over-time basis. Contracts that qualify for over-time revenue recognition are generally associated with the design, development, and manufacture of highly engineered industrial products used in commercial and defense applications and generally span between 2-5 years in duration. Revenue recognized on an over-time basis for the year ended December 31, 2025 accounted for approximately 51% 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. Application of an over-time revenue recognition method requires the use of reasonable and dependable estimates of future material, labor, and overhead costs that will be incurred as well as a disciplined cost estimating system in which all functions of the business are integrally involved. These estimates are determined based on industry knowledge and experience of our engineers, project managers, and financial staff. Changes in total estimated costs are recognized using the cumulative catch-up method of accounting which recognizes the cumulative effect of the changes on current and prior periods in the current period. During the years ended December 31, 2025, 2024, and 2023, there were no significant changes in estimated contract costs.
If a performance obligation does not qualify for over-time revenue recognition, revenue is then recognized at the point-in-time in which control of the distinct good or service is transferred to the customer, typically based upon the terms of delivery. Revenue recognized at a point-in-time for the year ended December 31, 2025 accounted for approximately 49% of total net sales.
Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Consolidated Balance Sheet. Contract assets primarily relate to our right to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. Contract liabilities primarily consist of customer advances received prior to revenue being earned. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Consolidated Balance Sheet.
Inventory
Inventory costs include materials, direct labor, purchasing, and manufacturing overhead costs, which are stated at the lower of cost or net realizable value. We estimate the net realizable value of our inventories and establish reserves to reduce the carrying amount of these inventories to net realizable value, as necessary. We continually evaluate the adequacy of the inventory reserves by reviewing historical scrap rates, on-hand quantities as compared with historical and projected usage levels, and other anticipated contractual requirements. We generally hold reserved inventory for extended periods before scrapping and disposing of the reserved inventory, which contributes to a higher level of reserved inventory relative to the level of annual inventory write-offs.
We purchase materials for the manufacture of components for sale. The decision to purchase a set quantity of a particular item is influenced by several factors including: current and projected price, future estimated availability, existing and projected contracts to produce certain items, and the estimated needs for our businesses.
Pension and Other Postretirement Benefits
In consultation with our actuaries, we determine the appropriate assumptions for use in determining the liability for future pension and other postretirement benefits. The most significant of these assumptions include the discount rates used to determine plan obligations, the expected return on plan assets, and the number of employees who will receive benefits, their tenure, their salary levels, and their projected mortality. Changes in these assumptions, if significant in future years, may have an effect on our pension and postretirement expense, associated pension and postretirement assets and liabilities, and our annual cash requirements to fund these plans.
The discount rate used to determine the plan benefit obligations as of December 31, 2025, and the annual periodic costs for 2026, was decreased from 5.55% to 5.35% for the Curtiss-Wright Pension Plan, and from 5.46% to 5.15% for the nonqualified benefit plan, to reflect current economic conditions. The rates reflect the hypothetical rates at which the projected benefit obligations could be effectively settled or paid out to participants on that date. We determine our discount rates for past service liabilities and service cost by utilizing a select bond yield curve developed by our actuaries, which is based on the rates of return on high-quality, fixed-income corporate bonds available at the measurement date with maturities that match the plan’s expected cash outflows for benefit payments. Interest cost is determined by applying the spot rate from the full yield curve to each anticipated benefit payment. The discount rate changes contributed to an increase in the benefit obliga tion of $12 million in the CW plans.
The rate of compensation increase for base pay in the pension plans remained unchanged at a weighted average of 3.39% for the current period, based upon a graded scale of 4.1% to 2.9% that decrements as pay increases, which reflects the experience over past years and the Company’s expectation of future salary increases. We also retained our mortality assumptions from prior year for the CW Pension plan by adopting a 50/50 blend of the Pri-2012 Aggregate and White Collar tables published by the Society of Actuaries in October 2019, while retaining the White Collar table for the nonqualified plan. We also retained the MP-2021 projected mortality scale published in October 2021, with no pandemic adjustments.
The overall expected return on assets assumption is based primarily on the expectations of future performance. Expected future performance is determined by weighting the expected returns for each asset class by the plan’s asset allocation. The expected returns are based on long-term capital market assumptions provided by our investment consultants. Based on a review of market trends, actual returns on plan assets, and other factors, the Company’s expected long-term rate of return on plan assets was decreased to 7.0% as of December 31, 2025, which will be utilized for determining 2026 pension cost. An expected long-term rate of return of 7.25% was used for determining 2025 expense, with 6.75% used for 2024 pension expense.
The timing and amount of future pension income or expense to be recognized each year is dependent on the demographics and expected compensation of the plan participants, the expected interest rates in effect in future years, inflation, and the actual and expected investment returns of the assets in the pension trust.
The funded status of the Curtiss-Wright Pension Plan increased by $33 million in 2025, primarily driven by higher asset returns in 2025.
The following table reflects the impact of changes in selected assumptions used to determine the funded status of the Company’s U.S. qualified and nonqualified pension plans as of December 31, 2025 (in thousands, except for percentage point change):
Assumption
Percentage
Point Change
Increase in
Benefit
Obligation
Increase/(Decrease) in
Expense
Discount rate
Expected return on assets
See Note 16 to the Consolidated Financial Statements for further information on our pension and postretirement plans.
Goodwill
We have $1.7 billion in goodwill as of December 31, 2025. Generally, the largest separately identifiable asset from the businesses that we acquire is the value of their assembled workforces, which includes the additional benefit received from management, administrative, marketing, business development, engineering, and technical employees of the acquired businesses. The success of our acquisitions, including the ability to retain existing business and to successfully compete for and win new business, is based on the additional benefit received from management, administrative, marketing, and business development, scientific, engineering, and technical skills and knowledge of our employees rather than on productive capital (plant and equipment, technology, and intellectual property). Therefore, since intangible assets for assembled workforces are part of goodwill, the substantial majority of the intangible assets for our acquired business acquisitions are recognized as goodwill.
We test for goodwill impairment annually, at the reporting unit level, in the fourth quarter, which coincides with the preparation of our strategic operating plan. Additionally, goodwill is tested for impairment when an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
We perform either a quantitative or qualitative assessment to assess if the fair value of the respective reporting unit exceeds its carrying value. The qualitative goodwill impairment assessment requires evaluating factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. As part of our goodwill qualitative assessment process for each reporting unit, when utilized, we evaluate various factors that are specific to the reporting unit as well as industry and macroeconomic factors in order to determine whether it is reasonably likely to have a material impact on the fair value of our reporting units. Examples of the factors that are considered include the results of the most recent impairment test, current and long-range forecasts, and changes in the strategic outlook or organizational structure of the reporting units. The long-range financial forecasts of the reporting units are compared to the forecasts used in the prior year analysis to determine if management expectations for the business have changed.
Actual results may differ from those estimates. When performing the quantitative assessment to calculate the fair value of a reporting unit, we consider both comparative market multiples as well as estimated discounted cash flows for the reporting unit. The significant estimates and assumptions include, but are not limited to, revenue growth rates, operating margins, and future economic and market conditions. The discount rates are based upon the reporting unit’s weighted average cost of capital. As a supplement, we conduct additional sensitivity analysis to assess the risk for potential impairment based upon changes in the key assumptions such as the discount rate, expected long-term growth rate, and cash flow projections. Based upon the completion of our annual test as of October 31, 2025, we determined that there was no impairment of goodwill and that all reporting units’ estimated fair values were substantially in excess of their carrying amounts.
Other Intangible Assets
Other intangible assets are generally the result of acquisitions and consist primarily of purchased technology, customer related intangibles, and trademarks. Intangible assets are recorded at their fair values as determined through purchase accounting, based on estimates and judgments regarding expectations for the estimated future after-tax earnings and cash flows arising from follow-on sales. Definite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives, which generally range from 1 to 20 years. Customer-related intangibles primarily consist of customer relationships, which reflect the value of the benefit derived from the incremental revenue and related cash flows as a direct result of the customer relationship. We review the recoverability of all intangible assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount might not be recoverable. We would record any impairment in the reporting period in which it has been identified.
